Postponed VAT

Sherene1 · ‎March 29, 2022

I need help with booking a postponed VAT report from HMRC in QBO UK set up for MTD.

I am in the U.S. Our U.S. parent office shipped some things to the UK office via DHL and some VAT was charged postponed. The proforma invoice and value declaration were in USD and no VAT included since from the U.S. No actual invoice or payment will occur since it's inter-company. I understand about the VAT code and making PVAT active. But how do I book an invoice that was in USD with no VAT to show the actual VAT being charged so it shows up on the VAT return done by QBO.

I appreciate any step by step help. I am an American, so bear with me!

ChristineJoieR · ‎March 30, 2022

Hi there, @Sherene1.

QuickBooks allows you to adjust your VAT return before you submit it to HMRC. However, any manual adjustments you make to your return will impact your VAT control and or VAT suspense account. If you are not sure about making an adjustment we recommend you speak to your accountant.

You are adjusting that particular box, rather than a transaction when you do the adjustment in the taxes prepare return section.

Go to Taxes and select VAT.
On the VAT page, select Prepare return for the period you are submitting for.
Select Adjust in the VAT line that you want to change.
Choose an Adjustment Date and Tax rate.
- Note: If you do not select the appropriate VAT code it will not be reflected on your reports or your return.
Select the Adjustment Account ▼ dropdown menu and choose an account.
- If you are making the adjustment because you received credit and you owe less VAT to the government, choose an income account that you created for this purpose.
- If you are making the adjustment to include a fine, penalty, or interest on a VAT return, choose an expense account, such as Interest Expense or Non-deductible Penalties.
In the Adjustment amount section, enter the amount of the adjustment.
Enter a Memo to describe the adjustment. Although optional, this is good practice as it will help to identify the adjustment if needed.
Select Save.

You need to use an adjustment account which the adjustment would post to. You can read this article for the detailed steps on how to make an adjustment for your returns.

Don't hesitate to come to us if you want clarification about VAT concerns. I will be there right away.

View solution in original post

MirriamM · ‎March 29, 2022

Hi there, Sherene1.

I'm here to lend a hand.

You can manually record the VAT by creating a VAT Adjustment. Let me guide you on how:

In the left menu, click Taxes.
Go to the VAT tab.
Locate the tax period you need to adjust.
Select Prepare return.
Click Adjust to the entry that needs to be adjusted.
Set the Adjustment date and the Tax rate.
Select the Adjustment account for adjusting VAT.
Enter the Adjustment amount.
Enter notes in the Memo section.
Click Save.

For more information about the process above, see this article: Create or delete a VAT adjustment.

To learn more about the common VAT codes, visit this resource: QuickBooks VAT codes.

Additionally, let me add this link that serves as your guide in filing your returns in the future: Submit a MTD for VAT return to HMRC in QuickBooks Online.

If you have other inquiries or tax concerns, let me know in the comments below. I’ll be around to back you up. Have a good one and keep safe.

Sherene1 · ‎March 29, 2022

Hi MirriamM,

Thanks so much for the quick reply! I was wondering if I just needed to do an adjustment, so makes sense.

You mention selecting the transaction to be adjusted. There isn't one (yet). The shipment was from the home office in the U.S. to the UK office, and the US office paid the DHL bill. They created a "proforma" invoice (with no VAT, in USD) for customs, but it wasn't actually going to be paid by the UK office.

Do I need to create a transaction in QBO in order to do the adjustment? I can do that, and handle the payment through inter-company loan if needed. I know the amount of tax from the HMRC postponed VAT report, and could back into the gross using 20%.

Is that what you would recommend so I'd have something to adjust? Or do you have a better idea? :)

Thanks for your help and patience!

Sherene

ChristineJoieR · ‎March 30, 2022

Hi there, @Sherene1.

QuickBooks allows you to adjust your VAT return before you submit it to HMRC. However, any manual adjustments you make to your return will impact your VAT control and or VAT suspense account. If you are not sure about making an adjustment we recommend you speak to your accountant.

You are adjusting that particular box, rather than a transaction when you do the adjustment in the taxes prepare return section.

Go to Taxes and select VAT.
On the VAT page, select Prepare return for the period you are submitting for.
Select Adjust in the VAT line that you want to change.
Choose an Adjustment Date and Tax rate.
- Note: If you do not select the appropriate VAT code it will not be reflected on your reports or your return.
Select the Adjustment Account ▼ dropdown menu and choose an account.
- If you are making the adjustment because you received credit and you owe less VAT to the government, choose an income account that you created for this purpose.
- If you are making the adjustment to include a fine, penalty, or interest on a VAT return, choose an expense account, such as Interest Expense or Non-deductible Penalties.
In the Adjustment amount section, enter the amount of the adjustment.
Enter a Memo to describe the adjustment. Although optional, this is good practice as it will help to identify the adjustment if needed.
Select Save.

You need to use an adjustment account which the adjustment would post to. You can read this article for the detailed steps on how to make an adjustment for your returns.

Don't hesitate to come to us if you want clarification about VAT concerns. I will be there right away.

Topics

Training

Community

Resources

Postponed VAT

Postponed VAT

Postponed VAT

Postponed VAT

Postponed VAT

Need to get in touch?