How do i change "Account Type" on a tax ? I erroneously created VAT tax as a liability instead of an expense.

Hi there, @julesmwaura.

I'll guide you on how you can change the account type of your VAT set up in QuickBooks Online to keep your records accurate.

You'll need to make the VAT inactive and create a new setup. This way, you'll be able to select the right account type for the tax. Being able to edit the account type on the current setup isn't available.

To make the VAT inactive:

1. In the Tax Centre, use the side arrows to find the tax you want to deactivate.
2. Click on Edit tax in the top right corner.
3. Select on Edit rates.
4. Click the green toggle option.
5. For custom rates - Under Action, click Edit and then click Make inactive.

After that, you can now set up the same VAT rate with the correct account type. Know that If you want VAT to only show on your transactions and reports, select 'Expenses' in the Account field when editing your VAT settings. If you want VAT to show on the VAT return, choose 'Liability'.

Moreover, the changes to the tax will apply to any future transactions you add it to. To change the tax for an existing transaction, open that transaction and edit the VAT manually.

To give you more details about managing VAT rates in QuickBooks Online, please check out this reference: How do I set up sales GST/VAT rates and use them on forms? (International QBO).

If there's anything else that I can help you with about taxes, please let me know in the comments below. I'll be here to lend a hand.