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Flat Rate Scheme (FRS) in QuickBooks Online

There are a number of different ways to submit a VAT return in QuickBooks Online. The Flat Rate Scheme (FRS) is a popular method for small businesses.

To learn more about the Flat Rate Scheme, click here.

  1. Go to Taxes, then Edit VAT.
  2. Click Edit settings.
  3. Tick the box that says Flat Rate Scheme (FRS).
  4. Enter the percentage and your tax registration date.
  5. Select Save.

We’ve made some changes to Box 1 adjustments in QuickBooks. Any adjustments you make to Box 1 (VAT due on sales and other outputs) no longer affects Box 6 (net value of sales). To do so:

  1. Go to Taxes then VAT.
  2. Select Prepare return on the open VAT return you wish to adjust.
  3. Click Adjust next to Box 1.
  4. Choose the correct Adjustment account, and enter the Adjustment amount.
  5. Once you select Save you will see a pop up message to confirm the new adjustment. Please read the message carefully and if you agree, click Go for it.

That's it! The new adjustment will show next to Box 1 on your VAT return.

You may leave the scheme at any time by telling HMRC, though you will normally leave at the end of a VAT accounting period. HMRC will confirm the date you left the scheme in writing.

Things to remember:

  • You must notify them if there are significant changes to your business which may affect your eligibility to use the scheme.
  • HMRC may also take you off the scheme if they find that you have calculated your VAT incorrectly or that you have become ineligible but have not told them.
  • If you leave the Flat Rate Scheme, you must wait at least 12 months before you rejoin.

For more information, consult your accountant or go to the HMRC website.

To leave the scheme in QuickBooks

Once HMRC confirms the date of your departure from the scheme, go to:

  1. The Taxes section in QuickBooks, and click Edit settings.
  2. Untick the FRS box.
  3. Select Standard or Cash as the new VAT accounting method.

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