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LTG1
Level 2

Flate Rate VAT rate change 1st year discounted rate

Hi,

We have been FRS registered for just over a year now and need to increase our FRS rate by 1% as the discounted period has come to an end.  I have attempted to do this by browsing to Taxes > Edit VAT > Edit Settings and entering the increased rate into the % box but I am finding that the increase is applying to all sales in an existing open return which has a start date of 01/06/2021 and an end date of 31/08/2021.  We would like the increase to apply only on sales from 3rd July onwards as this date marks the end of our first FRS year and the start of the non-discounted second year.

 

Is this possible does anyone know?

 

Kind regards

 

Steve.

 

12 REPLIES 12
ShiellaGraceA
QuickBooks Team

Flate Rate VAT rate change 1st year discounted rate

Thanks for coming by, @LTG1.

 

I'll share some information about applying the VAT increase on a specific starting date. When you edit the VAT rate, you'll have the option to change the effective date. This way, you can select what date you want to start applying the increase.

 

Here's how:

 

  1. Go to Taxes.
  2. Select the Edit VAT drop-down arrow.
  3. Click Edit settings and then Effective date for the new scheme. The Open Transactions column will appear on the VAT report.

 

Want more details? Check out this guide: Set up and edit VAT settings, codes, and rates.

 

If you need help with other taxes tasks, browse this link here to go to our general taxes topics with articles.

 

Please don't hesitate to reply if you still have questions or concerns with taxes. I'll be around for you. Take care and stay safe.

LTG1
Level 2

Flate Rate VAT rate change 1st year discounted rate

Thanks for taking a look and replying  @ShiellaGraceA  When I attempt to change the effective date, vat rate and save the next time I go into settings the effective date has reverted back to the original date of 31/05/2020.

When looking at our open return I can see that the balance has increased as we have increased the vat rate on all sales within the open returns period.

 

Not too sure what else to try other than open a support ticket....

AlexV
QuickBooks Team

Flate Rate VAT rate change 1st year discounted rate

Hello LTG1!

 

Thanks for the reply! Let me further assist you in updating the FRS rate.

 

First, I'd like you to know that the Effective date for new scheme is used only when you change the VAT accounting scheme from Standard to Cash and vice versa.

 

Currently, QuickBooks Online doesn't support FRS rate changes in the midyear or middle of the period. What I can suggest is you use the Bridging Software to file your FRS VAT returns during the periods that are subject to a change if you're on MTD. 

  1. Go to Taxes > VAT > Edit VAT > Edit Settings.
  2. Remove the checkmark on the Flat Rate Scheme (FRS) box. 
  3. Follow the steps in this article on how to use the bridging software: Submit a VAT return through bridging software - MTD for small businesses.

 

This will need a manual calculation to determine what you need to enter on your return. Once done, you can turn the FRS back on.

 

Here are some of the articles you can check. These will show you how to pull up VAT-related reports:

 

Need more help? Leave a comment below and we'll respond as soon as we can. Thanks!

LTG1
Level 2

Flate Rate VAT rate change 1st year discounted rate

Thank you @AlexV Firstly thanks for taking the time to correct the previous response.

 

This is really disappointing to read as it has made what should be a really simple change into a complicated one!  Do you have any advice as to how to generate the 'CSV file containing your client's VAT information'.

 

Many thanks

 

RenjolynC
QuickBooks Team

Flate Rate VAT rate change 1st year discounted rate

Thanks for your prompt reply, LTG1.

 

I have some information about your request. 

 

You can watch the video tutorial in this article: Submit a VAT return through bridging software - MTD for small businesses. This provides the step by step instructions where to get the version of the template you could use for the CSV file. Note: You may need to manually edit some columns in the spreadsheet.

 

Once done, save the file on your computer and go back to QuickBooks, then click Browse to import. Follow the rest of the steps in the article in mapping the field and complete the process.  

 

If there's anything else you need, please don't hesitate to reach out again. We're always around to help. Have a good day ahead!

LTG1
Level 2

Flate Rate VAT rate change 1st year discounted rate

Hi again,

 

I just wanted to clarify something with your response if possible...

 

So I understand we will need to create a VAT report and then adjust the vat in that report to account for the 1% FRS increase during the middle of the period and then submit it using the bridging software but I just wondered if I still need to perform step 1 & 2 as detailed below?

 

 

  • Go to Taxes > VAT > Edit VAT > Edit Settings.
  • Remove the checkmark on the Flat Rate Scheme (FRS) box. 

 

I was just looking at producing a report for the vat period which in our case is 01/06/2021 - 31/08/202, adjusting the vat amount where appropriate and then submitting using the bridging approach. At the start of the new period I was going to increase the FRS amount by 1% on the 01/09/2021 so all sales in this new vat period and for the future would be correct from a vat rate perspective.  If I do this do I still need to perform steps 1 & 2?

 

Kind regards

 

Steve.

 

KlentB
QuickBooks Team

Flate Rate VAT rate change 1st year discounted rate

Thanks for getting back to us, Steve.

 

Since you'd adjust the VAT amount of the report to account for the 1% FRS increase, you can just skip those steps. This way, the VAT rate on all your sales within the open returns period won't increase.

 

I recommend reading this guide to ensure that you can accurately file your FRS VAT returns for the periods that are subject to change: Submit a VAT return through bridging software - MTD for small businesses. You also visit our FAQ page to learn more about how QuickBooks MTD bridging solution works.

 

Feel free to visit the Community again with any questions and concerns you may have. We're always here to back you up.

LTG1
Level 2

Flate Rate VAT rate change 1st year discounted rate

Hi there,

It is now time for me to submit the VAT return through the bridging software but I do not have the 'Submit with a spreadsheet' option on the drop-down menu on the 'Prepare return' button. MTD is setup and we have submitted numerous returns in the past.

 

The options I have are:

 

  • Error check your return
  • View Summary
  • View VAT details
  • View exception details
  • Download Audit report

 

Please can you help as I cannot get past step 2 of the instructions located here - https://quickbooks.intuit.com/learn-support/en-uk/value-added-tax/submit-a-vat-return-through-bridgi...

 

Many thanks

 

Steve.

 

AlcaeusF
Moderator

Flate Rate VAT rate change 1st year discounted rate

Hello @LTG1,

 

Thank you for posting here in the Community. I'm here to help you submit the VAT return in QuickBooks Online.

 

It usually happens when you need to re-authorise QuickBooks for MTD. Third-party applications like QuickBooks need to refresh the connection every 18 months based on HMRC's guidelines.

 

To disconnect your account:

 

  1. Click the gear icon and select Account and settings.
  2. In Advanced, select Making Tax Digital.
  3. Hit Learn how to disconnect and follow the steps.

 

Once done, you can follow these steps to reconnect:

 

  1. Make sure you are using the correct sign in credentials. To check, sign in to the HMRC website and if the Making Tax Digital message appears on the homepage then you are using the correct account. 
    • Note: If you don't know what your MTD credentials are, check your inbox and search for an email sent to you by Government Gateway. It will contain the correct MTD credentials.
  2. In QuickBooks, go to the Advanced section under Account and settings, select Learn how to connect.
  3. Select Let's go, this will take you to the HMRC page. Once you have read the guidelines, select Continue.
  4. Next thing you need to do is grant QuickBooks authority to interact with HMRC. Follow Step 2 in this article.


In case you still can't get past step 2, you can contact our QuickBooks Support Team. Our support will need to check your account and help ensure you can submit the tax return successfully.

 

Here's how:

 

  1. Click the Help option in the upper-right corner.
  2. Go to the Search tab.
  3. Select Contact Us.
  4. Enter your concern, then hit Continue.
  5. Choose Have us call you or Chat with us

 

For additional reference, you can share the following article about how to connect MTB for clients if you plan to have an accountant in the future: How to reauthorise QuickBooks Online for MTD.

 

Fill me in if you have further questions about submitting a VAT return in QBO. I'm always here to help. Take care always. 

LTG1
Level 2

Flate Rate VAT rate change 1st year discounted rate

Thanks @AlcaeusF I will give this a go.

LTG1
Level 2

Flate Rate VAT rate change 1st year discounted rate

After chatting to support for 1.5 hours we ended up disconnecting & re-connecting MTD and turning off FRS which eventually gave me the 'Submit with a spreadsheet' option.

 

So I am now at the point where I am able to upload a spreadsheet with box 1 and box 6 figures but don't know what to adjust so I end up paying HMRC 6.5% FRS on some sales and 7.5% FRS on others.  Does anyone have any ideas as I am really not good with these things (which is why I purchased Quickbooks in the first place)?

 

In my mind the only figures that I can adjust in the spreadsheet I upload to Quickbooks using the bridging option are box 1  - VAT due on sales and other outputs and box 6 Net Value of sales.  I need to some how pay HMRC 6.5% FRS on some of the sales and 7.5% FRS on other sales.

 

Apologies If I am being a bit stupid here as I appreciate this may be a simple question but I am a bit stumped.

JessT
QuickBooks Team

Flate Rate VAT rate change 1st year discounted rate

Hi Steve,

 

I appreciate the additional details. However, I recommend contacting our QBO Support team again for this case. That way, they can continue helping where you left off. They can use a screen-sharing tool for this.
 

  1. Click the Help (?) icon at the top.
  2. Type Talk to a human.
  3. Enter a description of the issue in the What can we help you with box.
  4. Choose I still need a human.
  5. Select the Start messaging option.

 

If you have other questions, you can always go back to this thread.

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