hi Paul

Unfortunately we all buy on what the advert says. 

My problem with the solution we keep being given, is I already have an automated entry from my linked bank account which shows an entry of £1092.08.  This equates to

214.34 duty

612.74 vat

45.00 deferment fee

70.00 customs clearance

150.00 delivery

Now, everything in the above is zero rated for VAT apart from the import VAT which is 100% of 612.74

Bearing in mind I have an automated entry to include all of this, please can you advise how I bolt on the solution/fix we keep getting steered towards into that automated entry?  If you can I will be very grateful.  If not I will be cancelling my subscription and going to Xero, as I have been informed that this can easily be done using their book keeping/accounting software

As you will no doubt have guessed I am not an accountant, but as someone who is looking for a pragmatic solution, entering a 100% VAT option seemed totally plausible and for what it's worth I still don't understand why it doesn't work

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@Whistling Dixie wrote:

As you will no doubt have guessed I am not an accountant, but as someone who is looking for a pragmatic solution, entering a 100% VAT option seemed totally plausible and for what it's worth I still don't understand why it doesn't work

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... because any percentage rate needs a nett amount to calculate against.  A VAT Rate of 100%, when shown a VAT Inclusive figure of £100 will produce £50 nett plus £50 VAT to give a total of £100.

Any simple VAT percentage in this instance would fail because we need a nett figure of £zero - so the calculation becomes infinite.

I'm not saying it would be impossible for QBO developers to add a background VAT Code to do this (earlier posts suggest Xero has the option) but it's not big for their target audience I guess.

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@Whistling Dixie wrote:

My problem with the solution we keep being given, is I already have an automated entry from my linked bank account which shows an entry of £1092.08.  This equates to

214.34 duty

612.74 vat

45.00 deferment fee

70.00 customs clearance

150.00 delivery

Now, everything in the above is zero rated for VAT apart from the import VAT which is 100% of 612.74

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If you want to show all the details, you need to split the Bill onto six lines:

    Nominal Entry 3,063.70  (S=20% VAT Code which give 612.74 VAT)

    Negative Nominal Entry -3,063.70 (Z=0% or Exempt VAT Code)

    Duty 214.34 (Z=0% or Exempt VAT Code)

    Deferment 45.00 (Z=0% or Exempt VAT Code)

    Clearance 70.00 (Z=0% or Exempt VAT Code)

    Delivery 150.00 (Z=0% or Exempt VAT Code)

This will now give you a Bill showing

    Nett = £479.34

    VAT = £612.74

    Gross = £1,092.08

If you don't need to separate out the Duty/Deferment/Clearance/Delivery you can put these together on a single line.

Notice that QBO standard method is very similar except the nominal entries are £1 (or 1p depending on which version you see).  You then have to manually edit the VAT figure in the bottom right of screen to show the correct amount.  Personally, not a fan of doing that because it's not obvious to anyone reviewing at a later date.

Hope this helps.

Hi Paul

Thanks so much for taking the time to explain all and for giving me the fix for my specific entry, I really appreciate it

I followed your advice and think I have accurately entered as advised, but whilst the figures are correct, the VAT is shown as a negative number in red and I am unable to apply and accept.  I have attached a screenshot to show what I mean

Regards

Malcolm

No problem @Whistling Dixie 

Ah - OK.  If you're entering as a Bank transaction, the amounts are VAT inclusive.

(My method was for entering as a Bill which you then pay & match against the bank download.)

No matter.  Simple fix.

Line 1 is the line that's creating the VAT total, so make this £3,676.44 (=£3,063.70 plus VAT).

Leave Line 2 as is.  Z=0% Code is OK but you might want to use Exempt for consistency.

(think about which VAT code you used for the supplier's bill - use that)

If you locate the transaction in your VAT return or VAT report you should now find the VAT correctly reported at £612.74.

Personally, I also avoid using NoVAT altogether (I would always use Z=0 or Exempt).  Although NoVAT is technically correct for Out-of-Scope transactions, it does not record at all on the VAT100.  It then leads to confusion if your VAT quarterly totals do not tally with other Sales reports.

Hope that makes sense.

BINGO!!!

Many thanks Paul, I really appreciate your help.  I can stop scratching my head now.

Have a great afternoon and thanks again

Best regards

Malcolm

But if you post the VAT the way you are saying then it is showing as an expense on the supplier account to be paid,

My issue is the bank already deducts the VAT that is on our invoice and deducts it from our payment so how do I post this to just the VAT control account?

Hello RaeAsh, thanks for posting in the QuickBooks Community about 100 percent VAT transactions.  If you are wanting to post directly to the VAT control account, you could do a journal entry. We'd advice speaking with an accountant for direction on how to do that as we are not trained accountants. We do welcome comments from accountant users on this thread.