Hi
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.
Jay
Solved! Go to Solution.
Hi
I have worked this out... If I select "No Vat" next to the transactions rather than "Exempt" or "Zero Rate" then the VAT amount is correct.....
MiH
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.
Hi
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%
Simple example:
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...
Jay
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.
Hi
I have worked this out... If I select "No Vat" next to the transactions rather than "Exempt" or "Zero Rate" then the VAT amount is correct.....
MiH
Hello MiH,
Glad to hear you have got your issue all sorted now.
If you need any further assistance you now where to find us.
Have a good day.
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