Set up VAT

To manage your VAT process, you will need to set it up in the VAT Centre. To access the VAT Centre, start by clicking on VAT on the left navigation.  Setup VAT by entering a VAT Registration number, the month the current period begins, VAT accounting scheme and filing frequency.  Once that is done, you are ready to file your VAT.  You can always edit your VAT settings after your setup.

To set up your firm to account for VAT, follow these steps:

  1. Login to QuickBooks Online Accountant (QBOA) or QuickBooks Onine (QBO). To the left, select either Taxes or VAT.
  2. Now click the Set up VAT button.
VAT set up
  1. Here you can select the beginning month of your VAT period and also select the frequency, to when you require your VAT to be filed with
    HMRC. QBOA offers four filing frequencies. These are as follows:
  • Monthly
  • Quarterly
  • Half-yearly
  • Yearly
  1. Next, choose your VAT accounting scheme to either Cash or Standard which is the same as accrual. Please note that this must match your accounting basis to realise the VAT income and expenditure on your VAT reporting
  1. Now enter your VAT registration number
  2. Tick the checkbox for Flat Rate Scheme (FRS), if your business is entitled to this.​

Your VAT codes will now be automatically set up.

Read File the VAT I owe on how to prepare and submit a VAT Return to HMRC.

Editing your VAT Settings, Codes and Rates

  1. Login to QBOA or QBO
  2. To the left select Taxes or VAT
  3. Located at the top right, click the drop-down arrow beside Edit VAT and then choose Edit Settings or Edit Rates

​Edit Settings allows you to to make corrections to your VAT registration number, changes to your filing frequency, (for example move from monthly to quarterly), or simply to amend your VAT accounting scheme from a cash basis to the accrual basis.

Edit Rates allows you to  amend some, not all the percentage rates for particular VAT codes. You would not be able to alter the standard rates for sales and purchases. You can amend the rate of percentage for reduced sales and purchase tax. A drop-down rate history shows the different rates used.

Additional VAT codes

To set up additional VAT codes unique to your firm, please do the following:

  1. Login to QBOA or QBO
  2. To the left select Taxes or VAT
  3. Located at the top right, click Add Tax beside the Edit VAT box

This will let you to choose a title for this specific tax and give you the option to choose a suitable percentage tax rate. You can use this for a tax rate for a foreign country outside Europe, where, for example VAT is not permitted, however, you may pay export or tax duty on sales and purchases.

To Prepare and File your VAT Return

  1. Login to QBOA or QBO
  2. To the left select Taxes or VAT
  3. Next click on Prepare return in blue and check the necessary details.
  4. Any adjustments that need to be made for purchase VAT reclaims and on sales VAT and outputs, can be made at this point, by clicking the Adjust link in blue.
  5. To complete you can either click Mark as filed or Export or File online with HMRC

QuickBooks Online is HMRC accredited.

Create a tax group

1. Depending on the version of QBO you are using, click the VAT tab in the left hand navigation
2. Click New Tax
3. Select 'An additional group rate' and click Next
4. Enter the Tax Code and Description
5. Select the Tax Rates for the group and where it applies to Net, Tax or both.
Note: If you need to add more than two tax rates, click Add Rate
6. Click Done