Hey there, Harry. Thanks for joining the thread and detailing your concerns about accurately applying VAT to your transactions.
Yes, you're on the right track. Since you paid £119.99 for the monitor (which includes VAT), you should indeed enter £119.99 in both the "Total before sales tax" and "Total" columns. The "Sales tax" column should be marked as zero since you’re not reclaiming or accounting for VAT separately.
As you are not VAT registered, the best practice is to record the total amount paid (including VAT) as your expense. This accurately reflects the actual cash outflow associated with the purchase of your monitor.
Here's how to record it in QuickBooks Online (QBO):
- On the + New icon, look for Expenditure.
- Choose No VAT under Amounts are.
- In the Total before sales tax column, input the total £119 amount you paid.
- Set the Sales tax column to 0, as you're not claiming back any VAT.
- The Total should also be £119.99, matching the Total before sales tax.
You're managing everything correctly. Therefore, the 'Sales tax' as 0 and both 'Total before sales tax' and 'Total' the same are the correct steps. This is a common scenario for businesses or individuals who aren't VAT registered, so you're definitely on the right path.
This method ensures your accounts reflect accurate expenditures without the need to separate VAT, simplifying your financial reporting since you are not dealing with VAT reclaim procedures.
Additionally, I’ve attached an article that provides detailed instructions and tips to ensure you handle VAT efficiently and accurately within your QuickBooks account: Pay and manage VAT in QuickBooks.
It's been a pleasure assisting you with your VAT management. Should you have any further questions or require additional support navigating QuickBooks, please don't hesitate to reach out at any time. I'm here to help ensure everything runs smoothly for you. Wishing you great success in your financial endeavors. Take care, Harry!
