Recording a VAT payment against a previous VAT return

johnpaulcain · ‎January 16, 2020

I have just started to use QuickBooks Online.

I am adding all the information from the bank statements I have imported.

I cant allocate an older VAT payment, I get the error "You have either selected a tax liability account on a transaction where it's not allowed, or haven't specified a tax rate along with it."

I haven't entered any old VAT return info to pay it against or record payment.

Any help much appreciated.!

John C · ‎January 16, 2020

Hi johnpaulcain

What account are you choosing when attempting to allocate the transaction? If you are accounting for a historic VAT payment that doesn't relate to any submissions you have made using the VAT centre you will have to create a one off expense account and from then on any payments relating to submissions made from within the VAT centre will be recorded within the taxes centre and then a match will be found with the corresponding amount in the banking section.

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John C · ‎January 16, 2020

Hi johnpaulcain

What account are you choosing when attempting to allocate the transaction? If you are accounting for a historic VAT payment that doesn't relate to any submissions you have made using the VAT centre you will have to create a one off expense account and from then on any payments relating to submissions made from within the VAT centre will be recorded within the taxes centre and then a match will be found with the corresponding amount in the banking section.

johnpaulcain · ‎January 16, 2020

To be honest I am confused.

I created a new expense account called VAT - Previous Payments. This enabled me to allocate the bank payment.

But it screws up the accounts reporting. The VAT Control Account now shows an opening balance against all VAT you received from old invoices in previous VAT periods, this then shows as a debt on all the accounts reports.

So this does not seem to be the correct way to deal with it.

John C · ‎January 16, 2020

Hi johnpaulcain

Does the payment you have just allocated correspond to any of the VAT period you have marked as filed/submitted in the Taxes section?

If you enter historic transactions /they do not relate to any periods marked as filed/submitted from the taxes page they will populate in the VAT control account.

johnpaulcain · ‎January 16, 2020

Yes, they are, they are historic information entered into QuickBooks, VAT submissions already done (pre-quickbooks).

John C · ‎January 16, 2020

Hi johnpaulcain

When you enter any transactions with a VAT code allocated to them they will populate in the VAT control account. They are only removed from the control account when they are contained within a period that is filed. In this instance they will remain in the VAT control account unless you allocate the transactions with a No VAT code or journal the amount out from the control account.

The method I described to allocate the VAT payment is correct however we must make you aware that we are not trained accountants and therefore we advise you to seek clarification from an accountant.

johnpaulcain · ‎January 16, 2020

I fail to see why this is a trained accountant issue?

This is purely a book keeping issue.

How do I journal the old VAT figures pre quick books out of the VAT control account. They are screwing the accounts reports up as they should not be there.

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Recording a VAT payment against a previous VAT return