Historical VAT

Hi DanFar, thanks for joining the QuickBooks Community!

You can include the reclaimable expenses as exceptions on your first VAT return to HMRC. To do this, you'll first need to file a blank return on QuickBooks, so that the system can then trigger the exceptions to be created on your next (actual) return. Exceptions are generated when any transaction that was filed in a previous return on QuickBooks is edited (for example, the VAT code is changed). 

Please ensure firstly that the reclaimable transactions do not have any VAT code applied (set these to 'No VAT' on the 'amounts are' drop-down). After this, navigate to taxes > VAT > Edit VAT > Edit settings > Set the 'When do you need to start calculating your VAT from?' field to the month immediately prior to the start date of your first return (e.g. if your return runs from 01/06/22 - 31/08/2022, set the start month as May) > save. 

To file the nil return, go to Taxes > Prepare return > Check that the 'end date' is the day prior to the start date of your first return (you can edit this here if your default filing frequency is quarterly) > Mark as filed.

Marking the period as filed automatically opens the next VAT period, and you can now edit the reclaimable transactions to add the relevant VAT code which will then show as exceptions on your return. :)

 

I have done what you advised however when I go back to edit the list of expenses and add the VAT code to each item I am getting this warning - 

Yes, you can click on Yes, DanFar.

But before doing so, I recommend checking with your accountant for further guidance or confirmation of what's best for your business.

I've added some resources about making tax digital FAQ and vat adjustments:

•  Making Tax Digital (MTD) for VAT FAQ.
• Make VAT adjustments in QuickBooks Online.
• Everything you need to know about making tax digital for VAT.

If you have other VAT concerns, you can always post them anytime here. The Community is always ready to help.