How can I include individual VAT transactions from prior to VAT registration into a current return?

Hi Lee, thanks for posting on the Community. 

Creating a VAT adjustment would be the recommended way to account for exceptions on your first return in QuickBooks. If you don't want to do this, you can instead include the exceptions by creating a nil/dummy filing for the period prior to the start date of your current return. This will then allow the system to recognize any transactions dated prior to this as exceptions. 

To do this, temporarily disable MTD by clicking Edit VAT > Edit settings > Toggle off the slider for MTD > Save. After this, click Prepare return and amend the start and end date to a period prior to your current return. Check that the return contains no data, and then mark as filed.

Note: if you've already added the historical transactions with VAT in QuickBooks, you'll need to edit these to remove the VAT code (change the 'Amounts are' drop-down to 'No VAT' on each) before creating the dummy filing. Then, after marking as filed, edit each transaction again to add the relevant VAT code. 

You can then turn MTD on to sync your open return with HMRC's expected periods, and the historical transactions will show as exceptions.

We recommend working alongside your accountant if you need any support with this, to ensure the return is recorded accurately. If you don't already have an accountant, you can find one near you on our online directory. 

Thank you for your reply,

You write: "After this, click Prepare return and amend the start and end date to a period prior to your current return."

However, only the end date can be altered but not the start date, as it is automatically set to the day following the end of the last return period! Unless there's a way of doing it?

Hi Lee, have you already submitted or marked as filed a return in QuickBooks? If not, you should be able to change the start date by going to Edit VAT > Edit settings > Change the start month > Select save. 

Yes, we've already submitted a couple returns only to realize that 6 months worth prior to VAT registration can be included !

Hi Lee, in this case, you can simply add the historical transactions with the backdated date and applicable VAT code and they'll automatically be included as exceptions on your open return. To view the exceptions on a report, go to:

1. Taxes and select VAT.
2. In the Action column, select the dropdown arrow next to the VAT return.
3. Select View exception details.

Thanks for your reply,

That is precisely what I'd like to do, the question is how can those historical/backdated transactions be added?

Hello Lee, you can if  already in the system just go and change the date and what vat code it should be this will then create the exception, if they are not in they when you create the invoice you just put the date it needs to be and the vat code on and again it will then create the exception for you on the return. 

Thanks for your reply.

I'm not sure where you mean to change the date/vat code.

Would you be able to give slightly clearer guidance?

PS. Just to recap the case, in case you missed something.

We've filed a few returns, but now became aware of the right to include transactions prior to the VAT registration date. We'd like to include those in the next return.

Hi Lee, if you haven't already added the transactions (from prior to your companies VAT registration date) in QuickBooks, you can go ahead an add these manually (for example, as a Sales receipt for a sale, and an Expense for a purchase). Because the date on the transaction falls before your first filing in QB, the system will automictically recognize these as an exception and include these on the open return (as long as a VAT code is assigned to the transaction). 

Hi,

Please see my initial question as I think we may be going round in circles.

Please do help, as I very much want it, but it has to match the facts, which have all been stated.

Hi Lee, I can see that you've already added these in QuickBooks. Were they before or after your first filing in QuickBooks, and do they already have a VAT code applied? 

Hi Lee, for clarification on the above, were the transactions added to QuickBooks before or after you submitted the first filing?

It's helpful to know that QuickBooks automatically creates exceptions when you make changes to transactions that have already been filed in a VAT return within QuickBooks Online. This includes when you:

- Change the VAT code on a transaction. 
- Add, delete, or change the transaction amount. 
- Add or remove an income/expense account line in the transaction. 
- Add or remove a customer/supplier to the transaction. 

If they were added before your first filing and had the correct date and VAT code applied, they wouldn't be picked up as exceptions (QuickBooks doesn't include exceptions on the first return). Since you now have filings in QuickBooks, you can delete and re-create the transactions and the system will automatically flag these as exceptions. 

If they were added before your first filing in QuickBooks without a VAT code, you can simply edit the transaction to add a VAT code and this will then be included as an exception on the current open return. 

Thanks again.

In my case the transactions were in QB with the VAT code applied.

I’ve tried,

1. Removing the vat code
2. Deleting the whole transaction.

Both the above actions cause an exception to be entered into the current open return with a minus (negative) VAT amount.

Re-applying the Vat code or re-entering the deleted transaction does put another exception on the return with a positive VAT amount, but the negative entry also stays, with 2 entries cancelling each other out. So, we’ve gained nothing.

Clearly, QB does not ‘link’ or ‘mark’ a transaction as being/not part of a VAT return. It just assumes everything prior to today has been dealt included in a return!

I have this issue with a couple of my clients, and it needs to be sorted.

Can you please escalate this to a higher level of support to see if they can help.

Hi Lee, thanks for that information. As an exception is being created when deleting the transaction or removing the VAT code, this suggests that the transaction has already been accounted for in a prior filing on QuickBooks. So that we can view this with you further, I'd recommend reaching out to our support team on 0808 234 5337. They'll have the tools available to set up a screen share to view the transactions in closer detail. 

Hi,

I know it's been a while, but i still haven't got this sorted.

I've spent over an hour on the phone with QB Support Team, unsuccessfully.

I have treble checked and these transactions have NOT been accounted for in a previous return!

There is clearly a problem with the system as i'm having this issue with more that 1 client.

I need someone higher up (tech team ?) to be in-touch to sort this out.

One option would be to completely remove these transaction, but without leaving any trace! However that option is not available to me as a user.

Hi Lee, in order for this to be escalated to our higher support team you'd need to go via our QuickBooks Online UK chat service or by calling 0808 234 5337. This is because we require account-specific info and screenshots to demonstrate the issue, which we're unable to request here for security purposes.