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Paula Jane
July 8, 2021
Solved

Flat rate scheme incorrect

  • July 8, 2021
  • 1 reply
  • 1 view

I am on the flat rate scheme and having continual issues with Quickbooks calculating my VAT due on the net amount whereas it should be the gross amount. I have had emails saying that this has been fixed but it has not. I spent a frustrating session of over an hour on the chat with an agent who rather rudely insisted that I did not understand the flat rate scheme. Any ideas?

Best answer by MadelynC

I want to ensure this VAT calculation will get resolved, Paula Jane.


I hear your sentiments, and I know how important to get these figures to be correct. QuickBooks Online (QBO) calculates VAT based on the tax rate associated with a transaction.


You can review your transactions to ensure all information are correct. If your records are set up appropriately, you may consider contacting our Technical Support once more. They can investigate the issue further. And if need be, they can escalate it for you.


Here’s a reference that gives you insights about Flat Rate Scheme (FRS) in QBO: FRS explained.


Don't hold back to drop a comment if you have other questions or concerns besides VAT calculation. The Community is always here to help. Take care!

1 reply

MJoy_D
MJoy_DQuickBooks Team
QuickBooks Team
July 8, 2021

I can share some information with the VAT Flat Rate Scheme, @Paula Jane.

 

I suggest reaching out to an accountant or tax adviser in verifying if your VAT is due on the net amount or the gross amount. After that, I suggest reaching back to our Customer Support to get into details and explain it further to you.

 

You can reach our Customer Support for QuickBooks Online (QBO) by going to the Help icon at the top right of the account. Follow the steps below: 

 

  1. Sign in to your QuickBooks account.
  2. Select the Help (?) icon.
  3. Scroll down to select the Contact Us button and follow the prompts.
  4. You will be able to request a callback or start a live chat with an expert.

 

Check the following article to know about the different types of support we offer and their availability: QuickBooks Online Support.

 

Here's an article that tells you more about submitting VAT returns using the Flat Rate Scheme (FRS) method: Flat Rate Scheme (FRS) in QuickBooks Online. 

 

If you have other questions about your transactions, I'm happy to answer them for you. Just post it here as a reply and I'll take a look at it. Have a good one!

P
Paula JaneAuthor
July 8, 2021

I have already spoke to a live support agent. They were of no help.

 

I do not need help with using the flat rate scheme. The flat rate scheme calculates VAT on the gross figure not the net. I already have an accountant and we have used the scheme for 15 years.

 

This is taken from the HMRC website:

 

'Example You bill a customer for £1,000, adding VAT at 20% to make £1,200 in total.

The VAT flat rate for your business is 11%.

Your flat rate payment will be 11% of £1,200, or £132.'

 

The fault is with Quickbooks which is calculating the VAT on the net figure not the gross figure. As you can see from the above, this is incorrect.

 

Please advise as to what you will do to address this.

 

 

C
Carneil_C
Level 6
August 31, 2023

The person on the chat took me to the reports page and we typed in savings, there is no report by that name.

 

I am very confused by your answer. 

What amount on the P/L should i see in the following example

Net sales £100

Standard VAT 20%

Total invoice £120

Flat rate scheme 7.5%

Please tell me the accounting entries i should see in the system


Thanks for getting back on this thread, @mark344. 

 

Instead of Savings, search for the Profit and Loss report from the reports page. This shows your business's income and expenses, regardless of the balance sheet accounts. 

 

If you have already filed a return under the Flat Rate Scheme through Making Tax Digital, it isn't possible to edit or delete any transactions. However, if you need to change a previously filed transaction, there is a way to reverse it. Here's how:

 

  1. Create a journal entry to reverse the original transaction. It can be done by changing the amounts of the debits and credits.
  2. After creating the journal entry, you can create a new transaction with the correct information.

 

Please know that we're unable to provide more specific details regarding tax accounting questions since the entries in QuickBooks may differ.

 

For a detailed process, check out this reference: How to set up the Flat Rate VAT Scheme in QuickBooks Online.

 

Also, I'll add this article again that covers everything you need to know about the FRS: Understanding the Flat Rate VAT Scheme in QuickBooks Online.

 

You can always reply or reach out to us again if you need anything else with VAT or concerns about the reports. We're always here to guide and assist you whenever you need help. Take care always.

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