How VAT rate suggestions work in QuickBooks Online

When you link your bank accounts to QuickBooks Online, we use smart tools to make dealing with your financial data faster and simpler.

Introducing the suggested VAT rates feature. Previously, when entering transactions in QuickBooks Online, the VAT field was blank. Now, with this new feature, the VAT field is automatically filled with a suggested VAT rate. This aims to save you time and simplify your workflow by eliminating the need to manually input VAT rates.

Why we are suggesting VAT rates for you

The suggested VAT rate tooltip is a handy feature for transactions in banking that helps you keep track of your expenses. We look at data from companies in the UK, and use it to predict what the VAT code is probably going to be for your expense transactions that haven’t been assigned a rule or VAT rate. 

If you agree with the VAT rate suggestion, simply add the transaction and QuickBooks will apply the suggested VAT rate to your books. However, if you think the suggested VAT rate isn’t accurate, you can change it and choose the correct one for your business.

Be sure to take your time and consider each transaction and the associated VAT rate carefully. You are the only one who knows the entire story of the transaction. The VAT rate applied for each transaction is your responsibility as a business owner. 

For more information, check out the VAT rates on goods and services.

When will a suggested VAT rate appear?

A suggested VAT rate appears when you select a banking transaction that doesn't already have a fixed VAT rate through matches, rules, or default VAT rates. The suggested VAT rate will show when you add a transaction on the banking page.

The VAT suggestions will not appear in the following situations:

• when the banking transaction "matches" to another transaction in QuickBooks Online
• if you've applied a banking rule to the transaction
• if the account category chosen for the transaction has a default VAT rate associated with it

How does the suggested VAT rate tooltip work?

You don’t need to worry about accidentally closing the tooltip. It’ll always remain visible and won’t interrupt or hinder you from making selections when working in QuickBooks Online. 

If you’d like to dismiss the tooltip, you can permanently close it by selecting the X, and then No to confirm. 

Need more help? 

If you’re interested in learning more about matching transactions, how to use bank rules effectively, or just curious about the VAT rates in QuickBooks Online, here are some helpful articles:

• Add and match downloaded transactions 
• Review and categorise bank transactions 
• Set up bank rules to categorise transactions 
• Assign default VAT codes in your chart of accounts 
• VAT codes in QuickBooks Online