Set up and use VAT in QuickBooks Online

Learn how to set up and use the VAT feature in QuickBooks Online.

You can add the VAT on your invoices and receipts for easy and accurate filings. QuickBooks, then, lets you know when your VAT payment is due, so you can file on time and avoid extra fees.

Here's how to set it all up and get started:

• Step 1: Learn how to calculate VAT
• Step 2: Tell QuickBooks where you collect VAT
• Step 3: Add VAT categories to your products and services
• Step 4: Double-check your customers' info
• Step 5: Track VAT from your customers
• Step 6: Check how much you owe and why
• Step 7: File your VAT return

Step 1: Learn how to calculate VAT

The total VAT rate for each sale could be based on various factors like:

• Your customer's VAT exempt status.
• Where you sell or where you ship.
• Your service or product's VAT category.

Learn more on how QuickBooks makes each VAT calculation accurate.

Step 2: Tell QuickBooks where you collect VAT

QuickBooks keeps track of VAT on all of your transactions to accurately calculate VAT and returns.

If you just signed up to QuickBooks, set up where you charge VAT for the first time. To set up VAT, follow the steps below:

1. Go to VAT and select Set up VAT.
2. Select Start of VAT period and Filing frequency from the respective ▼ dropdowns.
3. Select your Reporting method (usually it'll be Accrual, but if in doubt, please consult your accountant).
4. Enter your VAT Registration No. (optional).
5. Select Next, then select OK.

Once you have set up the tax centre, you can also add custom VAT rates.

Step 3: Add VAT categories to your products and services

When you're ready, you can assign VAT categories to anything you sell. This lets QuickBooks know how much VAT you need to charge based on what exactly you're selling.

Step 4: Double-check your customers' info

The VAT rates can also change if you ship products or perform services at your customer's address. And some customers are not required to pay VAT, like churches, schools, or other non-profit organisations.

Make sure you have your customers' correct VAT status, billing address, and shipping address. Here's how to double-check your customers' info in QuickBooks.

Step 5: Track VAT from your customers

When you're done setting things up, you can start using the VAT feature. We'll show you how it works and where you'll see it when you create an invoice or receipt for your customer.

Step 6: Check how much you owe and why

Get a detailed look at the VAT you owe and why you owe it. This helps you make sure everything is accurate before you file and pay your VAT return.

Learn how to run the VAT Liability Report to view your VAT info anytime.

Step 7: File your VAT return

This is the final step in ensuring your VAT is set up correctly, so you’re ready to file your VAT return.

QuickBooks tracks your payment due dates in one place so you can avoid late returns and penalties. Once it’s time to file, review what you owe to make sure everything is accurate. After you file, you can track your new VAT payment in QuickBooks to keep your records up to date.

Learn how to file your VAT return and record your VAT payment.