Filing VAT Return in Quickbooks for the first time, incorrect VAT Balance

Glad to have you here in the Community, @Sarah1612.

You'll have to mark the VAT period as filed from the start of the VAT return up to the current quarter so you can get the correct period. I'd be glad to walk you through the steps.

Yes, you're correct. The reason why the VAT returns from the previous years showing on the VAT page is that you've categorised them as VAT Control which is not advisable to do so. Thus, it'll mess up the reporting of your Chart of Accounts or Balance Sheet.

To get this resolved, let's mark the VAT period as filed. Here's how:

1. From the left menu, click Taxes.
2. In the Returns tab, select the previous VAT returns.
3. Click Prepare return under the Action column.
4. Review the Start date and End date of the period.
5. In the Prepare VAT return page, select Mark as filed from the Submit to HMRC drop-down.
6. Click Continue.

I've got you an article for more details: Submit a VAT Return in QuickBooks.

Also, you'll need to record all the VAT returns filed from the HMRC online tool as an expense to QuickBooks. This way, it will be recorded in QuickBooks correctly and won't mess up the reporting.

However, I encourage seeking help from your accountant. This way, they can offer you some advice on correct accounts to use.

You might want to read these articles to learn more about MTD:

• Making Tax Digital (MTD) - FAQ.
• MTD VAT Drop-in Clinic.

Please feel free to drop a comment below if you have additional questions. We're always here to help.

Thank you Mark I really appreciate your support with this.

If I was to re-categorise all of the VAT payments as an expense, before doing anything else, would that make the VAT Return section make more sense?

As in, would it alter the VAT balance?

Or is it best to do the re-categorisation after marking the VAT as filed?

Thank you, Sarah

Hi Sarah1612

We recommend that you do any adjustments, re-categorising etc before you mark as filed.

Hello, I'm sorry, these instructions don't work for me.  I am using Quickbooks Desktop and there is no 'taxes' option.  I have also now gone back 20 years and re-categorised all of my VAT Payments to HMRC as an Expense.  However, this has increased the amount of VAT owed when I go to the 'Manage VAT' option.

All I want to do is start filing VAT using MTD from this quarter (ie. July - September), which means that I need Quickbooks to only look at this quarter, not the last 20 years.  I cannot find any article to help me - there is nothing that says 'Filing a VAT Return using MTD for the first time'.

Can anyone advise?  I only have 5 days left.......thank you very much

Having just looked again the big money balance seems to be made up from 'Unassigned amounts with no VAT Code or VAT Item' up to 2012.  Upon interrogating the report there are lots of entries that say 'should have filed' or 'balancing adjustment'.  I just don't know what to do.  One of the issues contributing to this is that when I moved to the Flat Rate Scheme a few years ago I was unable to use Quickbooks to work out the VAT as it didn't have a FRS function back then.

Anyone got any idea what I need to correct?

Thanks in advance.....

I appreciate the complete you've provided, @Sarah1612.

I can provide you with steps to ensure that your VAT returns are filed via QuickBooks Desktop. 

First, when filling your VAT return using QuickBooks Desktop, you need to have an active subscription to be on the latest supported version (currently QuickBooks 2019) and install all new updates and upgrades as they become available.

If you're using QuickBooks Desktop 2017 or 2018, you can e-file your VAT returns. For more insights, you can check this article: QuickBooks Desktop VAT e-filing & Making Tax Digital.

Let me know if you have other questions. I'm always here to help.