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Frequent Explorer **

VAT CODES on Bank deposits

Just switched from QB Desktop to QB Online.

 

I receive regular bank deposits from our merchant account and in Quickbooks Desktop there was never any VAT code associated with these deposits. Now QBO is asking for a VAT code for these transactions, but they are not sales or purchase related deposits. Do I have some setting wrong, or what VAT code should I use for these transactions? 

 

Also it is asking for a VAT code for an INTEREST income deposit on our savings account. These transactions do not have any effect on VAT, so why am I being forced to assign a VAT code? I'm worried this is going to mess up my VAT returns. 

Solved
Best answer 01-09-2019

Accepted Solutions
QuickBooks Team

Re: VAT CODES on Bank deposits

Hi SarahM01,

 

You can select the No VAT (0% Purchases) code for your expenses and No VAT (0% Sales) on for your interest transactions.

 

In QuickBooks Online, all bank transactions will need to have a code when you add them to your books. You will not mess your VAT returns as long as you choose the right codes.

 

You can visit us back here if you have other questions in mind.

15 REPLIES 15
QuickBooks Team

Re: VAT CODES on Bank deposits

Hi SarahM01,

 

You can select the No VAT (0% Purchases) code for your expenses and No VAT (0% Sales) on for your interest transactions.

 

In QuickBooks Online, all bank transactions will need to have a code when you add them to your books. You will not mess your VAT returns as long as you choose the right codes.

 

You can visit us back here if you have other questions in mind.

Frequent Explorer **

Re: VAT CODES on Bank deposits

Thank you very much for your help! That answers my question and I can see the deposits do not appear on my VAT return listing when coded in this way.

QuickBooks Team

Re: VAT CODES on Bank deposits

You're welcome, SarahM01!

 

Please keep on posting here if you have questions in the future. We will be happy to assist you.

Experienced Member

Re: VAT CODES on Bank deposits

Hi, I am based in Indonesia and just started using Quickbooks online. I am trying to match a bank deposit with an existing invoice. However my bank will deduct merchant credit card charges from the deposit before it goes into my account, so it doesn't match the invoice exactly.  When I try to resolve the difference and code the difference to a 'bank changes' account, it wont accept this until I choose a VAT tax code.

Problem is I want to select 'nil' but when I click on the option dropdown tab, nothing occurs. I have tried entering every letter or numbers 0 - 9 to prompt an option to appear but nothing happens, so I cant resolve the difference in amount. 

 

I have not set up any VAT tax or any other tax options in the system as I calculate them manually, so are confused as to what to do. Hopefully you can help.

Experienced Member

Re: VAT CODES on Bank deposits

 
QuickBooks Team

Re: VAT CODES on Bank deposits

I have a suggestion for you, Samanvaya.

 

Instead of matching the deposit to the invoice, you match it to the payment. We'll receive the invoice payment and deposit it to Undeposited funds. On the Bank Deposit page, we'll add the fee. This way, you don't have to resolve the difference since we'll deduct the merchant credit card charges to match the payment with the deposit. This will also prevent any tax error codes.

 

Here's how to receive the payment:

  1. Click the Plus sign (+) icon, then choose Receive Payment.
  2. Choose the customer, then choose the invoice. 
  3. Enter the amount.
  4. Click the Deposit to drop-down arrow, then choose Undeposited Funds.
  5. Click Save and close.

Then, let's add the fee. Here's how:

  1. Click the Plus sign (+) icon, then choose Bank Deposit.
  2. Choose a payment.
  3. Under Add funds to this deposit, choose an expense account for the fee, then enter the amount. Make sure it's negative.
  4. Choose the bank account where the payment will be deposited.
  5. Click Save and close.

After these steps, try to match the deposit to the payment. 

 

Feel free to leave a comment if you need further help. We're just around. 

Experienced Member

Re: VAT CODES on Bank deposits

Thats great and it worked perfect,  Thanks for all your help.  

Experienced Member

Re: VAT CODES on Bank deposits

Hi, The last advice you gave me worked fine however now I have another couple of issues.

 

1.I've transferred money to a vendor via the bank system and recorded it as an expense, however the bank details were incorrect so the funds were reversed. How do I deal with that?  I've coding it back to the expense account and even tried other income but each time it asks me for a VAT code.

 

2.Also when I try to code my bank interest payment to an income - interest earned account it again asks me for a VAT code, but won't let me select any options?

 

I have set 'Out of scope for tax' on my advanced setting.  Thanks

QuickBooks Team

Re: VAT CODES on Bank deposits


Hi Samanvaya

 

You will have to treat the reverse transaction/credit to your account as a supplier refund.

 

You will have to create a Supplier Credit, select the supplier you used in the initial expense, select the date that the amount was credited back in to your account, select the expense account you used in the initial expense, enter the amount and enter the VAT code you used for the initial expense (Out of Scope), save and close.

 

You will then have to create a bank deposit, ensure that the correct bank account that the amount was credited to is selected, select the date the amount was credited to your account, in the received from column select the supplier you used in the initial expense, in the account column select the creditors account/accounts payable, enter the amount and in the VAT column select No VAT (0% Sales), save and close.

 

You will then have to link the supplier credit and the deposit together; create a cheque payment (this will not create an additional payment in your chart of account/bank account, in the Payee box enter the supplier you used in the initial expense, enter the same bank account you used in the initial expense, the date can be the same day you create the cheque, on the right hand side you should see the deposit and supplier credit you created, select add on the deposit, select add on the supplier credit and select save and close.

 

In relation to the VAT Code for your interest earned can you provide uss with a screen shot of what happens when you attempt to select a VAT code.

 

 

 

 

Experienced Member

Re: VAT CODES on Bank deposits

Great, Thanks for that. Here is a screen shot of the message I get when I try to enter the interest credit.  Thanks

UNADJUSTEDNONRAW_thumb_e88e.jpg

 

QuickBooks Team

Re: VAT CODES on Bank deposits

Thanks for the quick response, Samanvaya.


I’m here to help you get past the error, so you can successfully record the deposit.


Based on the information provided, the Out of Scope Tax is already set as the default tax. You still have to manually assign the tax code and enter the correct information when adding a downloaded transaction.


This will help ensure the deposit is properly tracked in your account. After selecting the Out of Scope Tax, you should now be able to save the transaction.

 

I'm adding screenshots for visual reference:

 

vt.png vt1.png vt2.png

 


There you have it. Let me know how this turns out or if you have any other concerns. I'll be right here ready to help.

 

Experienced Member

Re: VAT CODES on Bank deposits

Hi,   Thanks for you reply. Much appreciated. My problem is that when I click on the Select VAT box, nothing drops down. The box just stays the same.

 

If I try to enter a letter to prompt it, the letter goes red and I get a message saying 'please enter a valid code'.  I've tried prompting the drop down box with every letter from A to Z and every number from 0 - 9, but  get the same response.

 

I ended up going to the Bank Deposits screen and using the  Add funds to this deposit and I was able to get it to accept without a tax code. However it would be great to know what I should actually do rather than this work around. 

 

Regards

QuickBooks Team

Re: VAT CODES on Bank deposits

Hello Samanvaya,

 

Which browser are you using?

 

Thanks,

 

Talia

Highlighted
Experienced Member

Re: VAT CODES on Bank deposits

Hi Talia,

 

Im using the QuickBooks app on a Mac laptop.

 

Regards

 

Rob

QuickBooks Team

Re: VAT CODES on Bank deposits

Hello again, Samanvaya.


It’s my priority that you can add the VAT code and use your QuickBooks smoothly.


I have a few steps that you can try to resolve the issue. To begin, check if your computer meets the QuickBooks Online app requirements for Windows/Mac.

 

This will ensure the application is compatible with your current setup. If so, you’ll have to refresh it for smooth usage.

 

Here's how:

 

  1. Go to Help at the top menu bar.
  2. Choose Reset App Data.

If you get the same result after resetting the app data, you'll need to uninstall and reinstall the application to start in a clean slate. Let me guide you how.

 

To uninstall:

 

  1. Drag the app from the Applications folder to the Trash located at the end of the Dock.
  2. Choose Finder>Empty Trash.

Once done, reinstall your QuickBooks. You can visit this website to download it: https://quickbooks.intuit.com/apps/.


Then, scroll down to the Get the QuickBooks Mac or Windows App section, and click on the Free Download link.

 

These steps should get you pointed in the right direction.

 

Keep me posted on how things go once you've tried the steps. I'd be waiting for your response.