Vat deducted from commission

Good day, SiAllman.

We can create a commission item and then assign a specific VAT category. From there, add it as a different line item on your invoice or sales receipt. I'm here to guide you through the steps.

Let's start with creating the product/service item for the VAT:

1. Go to the Sales menu and select the Products and services tab.
2. Select New and choose Non-stock or Service.
3. Give it a name.
4. From the Category ▼ drop-down, select the category that best describes your product or service.
5. Select the I sell this product/service to my customers checkbox. If you don't sell the item, you can leave it unchecked.
6. In the Sales information section, enter a description. This is what your customers will see on their sales form.
7. Enter an amount in the Sales price/rate field.
8. Select the Income account ▼ drop-down and the account you want to use to track the sale.
9. When you're done, select Save and Close.

Then, add it to your invoice or sales receipt. You can also set up and use the VAT feature. This way, QuickBooks can automatically do the VAT calculations for you on your invoices and receipts for easy and accurate filings. 

You can read through these articles as additional references in managing your transactions and VAT in QuickBooks:

• Add VAT categories to your products and services
• Set up and edit VAT settings, VAT codes, and VAT rates

I'll be right here to help if you need additional assistance with recording your transactions. Feel free to leave a reply below.

Hi @SiAllman 

You need to think of this as two separate transactions in QBO.

(1)  Your sale of livestock - zero rated / exempt from VAT.  Enter an Invoice or Sales Receipt for these in QBO.

(2)  Auctioneer's commission - VATable - enter this as a Bill or Expense in QBO.

If you enter as Invoice/Bill you will need to enter an offset payment (Contra).  You can do this by Journal : https://quickbooks.intuit.com/learn-support/en-uk/help-article/journal-entries/enter-contra-payments...

... or you can create a dummy Bank Account (my preferred method) - the contra payments go in/out of this dummy account (which always balances to zero) & the actual payments go in/out of the main bank account.

If you enter as Sales Receipt / Expense to/from the same bank account in QBO, the account will balance correctly.

Hope this helps.