Newbie. I'm not VAT registered. Logging expenses I've noticed that if I include VAT the VAT is then deducted from my expenses making the total less than I've paid?

Hi studio2,

I'll be glad to share an information on adding VAT to purchases.

If you don't need to add VAT on purchases, you can use the No VAT option.

On the other hand, the effect of adding VAT on your expenses depends on whether it's Inclusive or Exclusive.

Let's say you purchased an item worth €100 and it's 20% VAT inclusive. When you enter it in QuickBooks, the total will be €100 and 20% (€) of it is your VAT. If you choose Exclusive, 20% of  €100 will added to the transaction. Please see the screenshot for comparison.

Please note that not all VAT Codes posts the same way if a company is on a Flat Rate scheme. Here are some articles for your reference in the future:

• Common VAT Codes
• UK Flat Rate Scheme: How does it work?

Feel free to post again if you need more help.

Hi studio2

If you record any transaction with No VAT it will not be recorded in the VAT/Taxes section however it will still show on your Profit and Loss, Balance Sheet and Trial Balance.

Have the same issue and the only workaround seems to be manually go through each transaction and change the tax rate to No Tax, otherwise reports seems to calculatw the VAT exclusive prices which is not right! 

Have chat someone on Quickbooks about this but he had no clue! In fact he couldn’t even answer my question let alone give me a workaround to remove VAT the rate in bulk all these transactions replacing it with No VAT. Apparently we have to do this manually for each transactions! Woow! I mean come on this is such a basic feature that even the smallest companies provide! Changing the VAT rate from thousands transactions manually doesn’t make sense! 

Apart from this, when you run a report the transaction amounts seems to be recorded at VAT exclusive amounts. Shouldn’t these show up as VAT inclusive total amounts when you had this selected on each transactions?

For example I have an expense that I paid £100. The expense were recorded as VAT inclusive, so VAT exclusive amount is £80 on this spending and the VAT amount is £20 at 20% rate.

Everything seems fine here but when you run a financial year report what I see is recorded on that expense is £80 (VAT Exclusive amount) instead of £100 (VAT Inclusive amount)

This obviously not correct as I paid £100 for that expense so when I do may tax return I should be able to reclaim that amount which is £100.

Shouldn’t reports show the VAT inclusive totals when you run a report? 

I agree ,why is this not a thing on QB its a basic thing .you should be able to batch change anything .