Did you get a notice that your VAT rate is changing and you are using custom tax rates in QuickBooks Online? Here's how to update them:
To edit VAT rates:
- From the left menu, select Taxes. Then, choose VAT. If you have multiple tax agencies, in the top-left ensure that the correct tax agency is selected.
- In the top right-hand corner next to Add tax, select the Edit VAT drop-down then Edit rates.
- In the tax rate table, choose the rate you want to change and select Edit.
- In the Edit tax rate window, change the rate. You can also change the name if you like.
- Set the Effective date, if required, this will be the date from which the rate change will take effect.
- Choose Save.
What happens when you edit a VAT rate
- When you edit a rate, you must set an effective date i.e date from which the new rate must be effective
- The new rate will be available for new transactions entered after the Effective date
- If you create a new transaction dated before the set Effective date, the transaction uses the old rate
- If you don't set an Effective date while editing a rate the earlier rate can no longer be used even for past dated transactions
- Existing transactions that used the earlier rate remain unchanged unless you edit the transaction and specifically select a different sales tax rate.
- For recurring templates that use the changed component, new transactions created with the template use the new rate. Existing transactions created with the template and the earlier rate remain unchanged
- Reports show the data for both rates (before and after) if there are transactions for both the rates in a particular period