Hello there!
In QuickBooks Online (QBO), we want to make sure that the VAT settings are configured properly and the right tax codes are set up. Don't worry, it's not too complicated. Here's a step-by-step guide that can help you get started:
Set up VAT on Purchases:
- Go to Taxes, and select VAT.
- Select the Edit VAT ▼ drop-down arrow, then select Edit rates.
- If VAT for Purchases has not already been added, select Add tax rate.
- Select the Purchases checkbox.
- Give the new tax rate a name, description, and percentage rate (usually the standard), then choose an account and determine which return line you want the tax amount to appear on.
Record your Purchase VAT
Similar to VAT on sales, you will also need to record any VAT on purchases. Here's how:
- Go to Taxes, and select VAT.
- Select the Prepare return and check the necessary details.
- Any adjustments that need to be made for purchase VAT reclaims and on sales VAT and outputs can be made at this point by selecting Adjust.
- To complete, select Mark as filed or Export or File online with HMRC.
In addition, it's important to note that there's an expiry date for backdating and reclaiming your VAT on purchases and how the setup is done in QuickBooks. Please refer to the HMRC website regarding this for the complete details.
Commonly, VAT on purchases is not charged when the supplier is located overseas, yet there are some exceptions to this rule. For further guidance on this, please refer to HMRC.
Moreover, you can check out these articles to get more insights and information related to your concerns:
Please let me know if you have further questions about tax setup-related concerns in QuickBooks Online. I'm always here to help. Have a great rest of the day!
