Understanding VAT rate suggestions in QuickBooks

When you connect your bank accounts to QuickBooks Online, we use smart tools to suggest a VAT rate for transactions that don’t already have a rule, match, or default VAT rate. This helps speed up your bookkeeping and reduce manual entry.

Why VAT rates are suggested

QuickBooks analyses data from UK businesses to predict which VAT rate might apply to each transaction. You’ll see a suggested rate for expenses that haven’t yet been categorised.

If the suggestion is correct, simply add the transaction. If not, you can select a different VAT rate that’s more appropriate.

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

When suggestions appear

You’ll see a suggested VAT rate on the Banking page when:

• The transaction doesn’t match one already in QuickBooks
• No bank rule is applied
• The selected category has no default VAT rate

Using the VAT tooltip

The tooltip that displays the suggested VAT rate stays visible while you work, so you don’t lose track. If you want to hide it, select the X, then confirm by selecting No.

What's next?

If you’re interested in learning more about matching transactions or how to use bank rules effectively, here are some helpful articles:

• Add and match downloaded transactions 
• Review and categorise bank transactions 
• VAT codes in QuickBooks Online