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Date | Transaction | Amount | Type | Category |
01/08/2024 | VAT: VAT sellers service fee | -£0.16 | Business | Other business expenses |
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Hi @Kael
If you aren't VAT Registered, you still pay VAT on transactions but you can't reclaim it (as with any private consumer). It's therefore just another cost (Expense) to add to your outgoings.
If you want to track how much VAT you're paying you can separate it out (in any way you prefer) but the simplest way is just to enter all your costs including VAT.
So, a widget that costs £10.00 plus VAT - enter as costing £12.00.
No need to worry about the VAT as it's not relevant to you.
Hope this helps.
Hi @Kael
If you aren't VAT Registered, you still pay VAT on transactions but you can't reclaim it (as with any private consumer). It's therefore just another cost (Expense) to add to your outgoings.
If you want to track how much VAT you're paying you can separate it out (in any way you prefer) but the simplest way is just to enter all your costs including VAT.
So, a widget that costs £10.00 plus VAT - enter as costing £12.00.
No need to worry about the VAT as it's not relevant to you.
Hope this helps.
HI @paul72,
Thanks for the quick reply, I kind of assumed they would all be categorized as general expenses but thanks for the confirmation!
Would you recommend "Other financial charges" or "Other business expenses"? The description of the former is a little vague.
It looks like I have a lot to re-categorize to do as QuickBooks has already used the "VAT Paid" or "Professional Fee" category for alot of the transactions.
Thanks again!
Hi @Kael
I'd enter it in the same Category as the Seller Fee.
As above, since you aren't VAT Registered the VAT is just an Expense - so the actual cost of the Seller Fee to you is £0.96 (the £0.80 plus VAT of £0.16). Whether Etsy/QBO enter that as a single transaction of £0.96 or two (£0.80 plus £0.16) it has the same effect.
Don't get too hung up about categorising everything perfectly. As long as you're consistent - putting similar expenses in the same categories.
The Categories/Accounts are there (mostly) for your benefit - so you can track where your money is going. From a Tax/Accounting point of view an expense is an expense & they all get added together in the end (with certain caveats of course - but that's next level stuff!).
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