QuickBooks VAT return guide

This article is for small businesses that have not yet signed up for Making Tax Digital (MTD). We'll cover what you need to know before making a submission, how to submit a return and how to mark it as filed in QuickBooks. Plus, alternative ways to submit a return and get answers to frequently asked questions.

Already signed up for MTD? Great! Follow these steps to submit a VAT return.

Before you submit a VAT return

• Non-MTD submissions (like XML submissions) are no longer supported in QuickBooks. This means VAT-registered businesses that are not yet registered for MTD will be unable to submit return via the old way in QuickBooks. We'll cover alternative ways to submit a VAT return in this article.
• If you're on the Flat Rate Scheme or submit your VAT returns annually and are not yet signed up to MTD, you'll need to file through the HMRC Government Gateway. Once you've filed through the gateway, go to Mark your VAT as filed in QuickBooks to close the period.
• Check your reports to make sure your figures are correct. In Taxes, select the ▼drop-down arrow next to Prepare/Submit return to view the following reports:
  • VAT 100 report (this shows you the summary information for each box on the return.)
  • VAT detail report (this lists transactions that are included in each box on the return.)
  • VAT exceptions and reports (see transactions you have previously filed for but have since changed, deleted or added. Check that no VAT collected or credits earned are missed or duplicated.)
• If you need to make corrections to your sales or purchase VAT, here's how to adjust VAT liabilities.

How to submit a return directly to HMRC

1. Go to Taxes, and select VAT (Take me there).
2. Select Submit return to view your open return.
3. Confirm the dates and figures are correct. When you are ready to submit your return, select File online with HMRC.
4. Enter your Government Gateway user ID and password, then select Yes, I want to proceed. QuickBooks will now connect to HMRC to submit your VAT return.
5. When HMRC receives your VAT return, you will see the "Pending with HMRC." status and the message "HMRC is on the case. We'll notify you when the status of your VAT return changes.".
6. Select Close and continue working.
7. If your VAT submission is successful, the status will change to Approved by HMRC. You will be able to see the filing when you log into your HMRC account.

How to mark VAT as filed

If you don't have the option to submit your return or you prefer to file your VAT directly with HMRC, follow these steps to mark your return as filed and close the period.

1. Go to Taxes, and select VAT (Take me there).
2. Select Prepare return to view your open return.
3. Confirm the dates and figures are correct. When you are ready to submit your VAT return to HMRC, select File online with HMRC.
4. Select Submit a VAT Return/Set up a VAT Direct Debit Instruction, then select Submit a return. Copy the amounts from your QuickBooks Online return to the HMRC website.
5. Once you're done, go back to QuickBooks Online and select Mark as Filed.
   • Note: When you mark the VAT period as filed, QuickBooks creates a journal moving the amount of VAT due from the VAT control account to the VAT suspense account.
6. You can now close the books to protect transactions entered in the quarter you just filed.

Once you've paid off the liability to HMRC, you can record a VAT payment or refund.

How to view submitted returns

1. Go to Taxes, and select VAT (Take me there).
2. Select View return against the VAT return you wish to view. Or select the ▼dropdown arrow for more options.
3. You will see 'The VAT return was accepted by HMRC', as well as details of the submission.
4. Click Done to close the window and return to the Taxes dashboard.

How to calculate open transactions

An open transaction is the difference between what's been paid on the old VAT accounting scheme and what would've been paid on the new scheme, between the start date for the new scheme and the end date of the last filed period.

To calculate open transaction you'll need to:

1. Run the VAT 100 report from the beginning of when you started using VAT to the end of the last VAT Return.
2. Run the report once on the cash accounting method.
3. Run the report again on the accrual accounting method.
4. Take the difference between the two reports to get the Open Transactions figure.

Frequently asked questions