This article is for all UK VAT-registered businesses using QuickBooks Online to calculate and submit VAT to HMRC.
Note: From April 2022, all eligible VAT-registered businesses in the UK will have to keep their financial records in a digital form and submit their VAT returns online through Making Tax Digital (MTD) compliant software.
Set up VAT in QuickBooks Online
To manage your VAT process, you will need to set it up in Taxes in QuickBooks. You'll need to enter the following information:
- VAT Registration number
- Month the current period begins
- VAT accounting scheme
- Filing frequency
- In Taxes, select Set up VAT.
- You can also do this by selecting Set up VAT in QuickBooks from the Get things done page.
- Choose the month you need to start calculating your VAT from–think about the VAT period you're currently in and select its start month.
- Select your filing frequency, this is how often you submit a VAT return to HMRC.
- Choose your VAT accounting method.
- Select Standard (also known as accrual) if you record income and expenses when you send the invoice or receive the bill, regardless if the invoice of bill was paid or not.
- Select Cash if you record income and expenses at the time you actually receive a payment or pay a bill.
- Enter your 9-digit VAT registration number.
- If your business is entitled, select the Flat Rate Scheme (FRS) checkbox, enter the FRS percentage and the tax registration date.
- Select Next and OK.
Your VAT codes are now set up! Once that's done, you're ready to file your VAT. You can always edit your VAT settings after setup–which we'll show you how to do next.
More helpful links
Here's a list of the common VAT codes in QuickBooks Online.
Learn how to submit a VAT return to HMRC.