Thanks for joining the thread, @PanettaUK.
If you're on an accrual basis, you'll collect sales tax based on the invoices you've created for customers. This means that even if the invoices are not paid by your customers yet, the tax return will include these unpaid sales invoices.
You may want to change your reporting method to cash based. But before that, make sure consult your accountant for professional advise. Then follow these steps below:
- Go to Taxes and select Set up tax.
- Enter Tax name, Description, Tax agency name.
- Type your Business ID no (optional).
- Select your Start of current tax period.
- Choose your tax Filing frequency for VAT.
- Pick your Reporting Method.
- Enter Sales rate, then select This tax is applicable on purchases, if applicable.
- Select Next, then hit OK.
You can also add custom sales tax after updating your tax center setup.
In addition, you may want to check out this article about tax preference and see how the system calculates taxes: Set up and use VAT in QuickBooks Online. This covers steps checking how much you owe and file your VAT return.
As always, feel free to reply below if you have other questions. I'm always around to help. More power to your business!
