We are a small charity with 15% revenue created from trading services, so 15% of our income has VAT applied, rest is exempt ie all Donations or Grants.
We had to register for VAT and opted for a FRS scheme. Rate we are on is 6.5%
At the moment when I do the vat return QBs Vat's section multiplies this 6.5% rate to most of our Income rather than only the traded income.. can anyone help with this query?.. so say last quarter we collected £250 in Vat yet our VAT bill was £9.5k.
Does anyone know what is going on?
Any help will be great.
Solved! Go to Solution.
Welcome to the Community, @MiH.
Let me provide some insights on how the VAT and FRS calculated in QuickBooks Online (QBO).
The reason why your FRS 6.5% rate calculates most of your income is that all of your sales transactions have a 20% standard VAT. To correct this, you'll want to make sure that those transactions that shouldn't be calculated have a zero-rated VAT or No VAT.
Most importantly, I recommend seeking help with a VAT expert or your accountant. This way, they can help make sure that you submit a VAT return that is acceptable with HMRC.
You might want to check out this article to learn how to manage your VAT codes and rates: Set up and edit VAT settings, VAT codes, and VAT rates.
Please let me know if you need clarification about this, or there's anything else I can do for you. I'll be standing by for your response. Have a great day.
All the data is entered with either 20% Vat, Zero/No Vat or Exempt.. but still when QBs runs the VAT return all income is applied to this 6.5%
When I run VAT
I think its a technical thing on QBs .. I was wondering whether The QBs Vat is linked to the TYPE selected on the chart of accounts when you create a new code...
Thanks for getting back here, @MiH.
I've got steps to help you fix your VAT return. You can delete and then recreate the transaction number 2 (Crowdfunding income - £5000 No Vat/Exempt). As it's No VAT it should not be reported to any VAT return. If this still shows, I recommend reaching out to our QuickBooks Online care team to further investigate the root cause of the issue.
Let me walk you through the steps:
Here's a helpful article that you can check out just in case you want to edit VAT settings, codes, and rates: Set up VAT.
Please keep in touch if you need any more assistance with VAT return or any QuickBooks-related issues. I've got your back. Have a good day and keep safe.