We've recently updated the VAT Feature in accordance with the South African new rate in QuickBooks Online to ensure a smooth tax year-end for customers. Please see below for frequently asked questions and answers:
Q: How is QuickBooks Online handling the new tax change from 14% to 15% with effect from 1st April 2018?
A: The new VAT rate (15%) has been updated for all existing customers in their QBO accounts as of 4th April 2018. When you record transactions with a date after 1st April, the VAT code will default to 15%. For any transactions that you record with a date before 1st April 2018, the VAT code will be changed to 14% automatically.
The system has been built in a way that it uses 14% for all transactions before 1st April 2018 and applies 15% for all entries after 1st April 2018.
Q: What if I want to backdate my transactions (i.e. I'm still finishing off invoicing for March)?
A: As long as you select the transaction date before 1st April 2018, QuickBooks Online will still have the VAT code fixed at 14%
Q: What about recurring transactions – will they be updated automatically – and when?
A: The VAT code for recurring template does not update automatically. You will need to update the template manually via the steps below:
- Select Gear icon at the top, then Recurring Transactions.
- Double click to open the recurring template that you wish to update.
- Under the Tax column, select another VAT code.
- Change the VAT code back to the standard rate, and then save.
- The rate on the recurring template will then be updated.
Q: How about existing bank rules and inventory items? Does the VAT code update automatically to 15% for the existing bank rules for bank feeds downloaded after 1st April 2018?
A: Yes, the VAT code will be automatically updated for existing bank rules and inventory items
Q: Will QuickBooks Online now have one default VAT rate (i.e. 15%) or two (i.e. 14% and 15%)?
A: There will only be one default VAT rate in QBO, but it depends on the date of the transactions you are reviewing/recording. Transactions recorded on any date before 1st April 2018 are coded with default VAT rate of 14%. Transactions after 1st April will be coded with default VAT rate of 15%
Q: VAT Reports – how is QuickBooks Online handling a combination of 14% and 15% in the VAT return?
A: Transactions before 1st April 2018 will be showing the rate as 14% while transactions after 1st April 2018 will be showing with 15% on the VAT report (refer to screenshot A)
Q: For existing customers who have recorded transactions from the 1st through 3rd April 2018 before QuickBooks Online implemented the new VAT rate to their accounts on 4th April 2018, will the VAT code be automatically updated from 14% - 15% ?
A: Yes. VAT code will be automatically updated for those transactions and no manual update is required. When you open such transaction, you will see ‘updated standard’ under the tax column, which is an indication that the VAT rate has been automatically updated by QuickBooks Online.