How VAT Flat Rate Scheme works in QuickBooks Online
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- Опубліковано 8 лют 2025
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My name is Aaron Patrick, as an official Intuit QuickBooks Certified Trainer, I thought it would be good for me to give you a little tour into the world of QuickBooks Online!
In this series, we will start at the basics and work our way up to the more complicated areas for QuickBooks.
I am a Chartered Accountant, with accountancy practise that has 200+ licences with QuickBooks; my aim is to pass my knowledge onto you guys! No matter if you are an accountant, your self or a QuickBooks Online user, I am sure I can help you on your Journey!
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Great video, thanks Aaron .
My pleasure!
Great explanation thanks
Glad it was helpful!
Understand the basics but if you're charging 20% VAT and only paying over say 12% where does the 8% difference sit in the accounts? Same with purchases if you're still accounting for 20% VAT input but not reclaiming it where does that sit?
QuickBooks will post a profit and loss on the Flate Rate scheme adjustment against your P&L :)
@@TheQuickBooksChap Hello, Thank you for your answer. An example is I've posted a supplier invoice to the nominal ledger for IT @ £14.00 + VAT £2.80. The £2.80 has gone to the VAT Control account in the balance sheet To my mind the £2.80 should have also been posted to the IT account in the nominal ledger as it reduces profit. From your answer I assume at some point the £2.80 is transferred out of the VAT Control or do I have to manually transfer all of the VAT input amounts out to the relevant nominal accounts?
Great video. Just registered for VAT, and about to embark on running the Flat Rate scheme in Quickbooks. One question. How do I recover VAT paid on a capital item over £2000, but purchased prior to my VAT registration date, and previously posted in Quickbooks gross of VAT, into my first Flat Rate scheme VAT return (in line with HMRC dispensation for payments made during the last 3 years)
If you look for my pre VAT reg video, it will show you how to bring them into the first return 👍
Love the videos Aaron. Very helpful. Would fuel be classed as a capital item for a courier company spending over £2000 a month on the flat rate scheme?
Not a capital item, these see more like the VAN, computer equipment items like that
When I change the flat rate applicable to my business in QuickBooks it seems to change the VAT transactions and amount due to HMRC for all transactions previously processed in the current VAT payment period (a full year). This is not correct as I was entitled to 1% discount on all transactions processed up to the time I tried to change the rate. Can I enter an effective date for the new VAT rate to prevent this happening? Advice please.
You need to add the 1% manually and remember to update after the first year 👍
Hi Aaron great video.I am a courier and been flate for a while and have just done my first Digital tax return(With your help)My question is my next return I will be buying a new van(Capital expenses over £2k) and selling my old van.I get how to show the one I bought by ticking the box in right hand corner.. The old one I sell for say £5000 plus £1000 vat (Total £6,000) How do I enter that on my return??
Hi - you will need to treat the van as a capital item and claim AIA to get 100% of the allowance year 1 👍
I was referring to the VAT .The new Van I will raise an invoice and tick the box in top right corner so it credits the VAT to me in my flat rate return.But the old van I will have to give HMRC the vat charged in the sale.How do I do that in quickbooks.Thanks..
@@diesel6436 you just need to treat the van like any other sales invoice, but ensure from a bookkeeping entry you show it as a capital expenditure and it an income service 👍
Ok Thanks Aaron for that.
Cheers
Hi Aaron
I thought you should be aware.Quickbooks is not compatable for Capital Items sales if you are on the Flat Rate Scheme.Ater speaking to two accountants and then to Quickbooks on QB forum they admitted I would have to change software to do my VAT return.QB have been trying to get IT to modify the software for nearly 2 years and it cant be done aparently.All input Capital Items sales can only be added to the turn over but this wont let you pay the full VAT rate(20%) for the VAT return.Cant believe QB cant fix this..
One other question. VAT Registration Date is 1/8/22. Due to HMRC delaying my application for Annual Accounting on the Flat Rate scheme, I have now been asked to submit a return for August and September combined, and then for October - April inclusive (April being the chosen end of my Annual Accounting period). Unsure of what to do in Quickbooks I have ticked Annual Accounting as HMRC advised that the system would know from the Govt. Gateway link which dates a submission was required in this first year and also my April Annual Accounting date. Is this the case?
MTD should dictate the periods, so ensure MTD is set up and ensure the first day of the period is shown and you should be fine 👍
After my first year on the Flat Rate scheme I'm approaching the 25th July when I need to increase my rate by 1% from that enjoyed in year 1 of the scheme. Should I process all my Vat transactions up to this date before changing the rate (even if this is done after the change date but the transactions are dated before) or can I change the rate on the 25th July and rely on Quickbooks to continue to apply the discounted rate to any transactions I subsequently process that are dated before this date?
You can change at any time during the period 👍
Does Quickbooks recognise the income you make on the flat rate and the 20% charged? Say my FR is 10% would the software show on my profile those sales where i made a 10% profit on the vat automatically and class it as income Many thanks
Yep, posts the profit / loss automatically
Ello