Went from Flat Rate to Stdrd VAT (Cash acctg) at end of last VAT period. Will edit preferences in QB. Online help says must also amend COA. What exactly must do!

I can follow Intuit Help on changing from Flat rate to Standard VAT to amend preferences but at the bottom it says 'Important: If you change from a flat rate scheme back to a standard scheme, QuickBooks does not automatically change the chart of accounts back to the way it was for standard VAT. You must make those changes manually.'  I am not sure what to do and how QB will know to use whatever accounts I may add.  Please could someone help?   Thanks!

Answer

Thank you Graceman - really helpful! 

 We have only ever been Flat Rate and when I first set it up in QB I just did it in the VAT preferences to say Flat Rate Scheme, cash accounting and the relevant %age.  I didn't think of creating a special VAT liaiblity/control account so the COA has always been using '2550-VAT Liability' for sales and purchases on the HMRC VAT Supplier to date.

So if I understand you correctly I should create a new entry on the COA called 'VAT Control' of type 'Other Current Liailibity'.  I then update the tracking VAT on Sales and Purchases in HMRC VAT Supplier settings to  both use this new 'VAT Control' account?

Sorry, just want to be 100% sure that I have understood correctly before going ahead!

Thanks again.


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