Why is the new 21% VAT rate effective from September resulting in a minus vat expense?

Hello there, @whelehancat.

The 21% reduction rate is applicable from 1 September 2020 to 28 February 2021. Let me share some information on how this change affects your transactions in QuickBooks.

Let's make sure that this RCS VAT code is enabled in the VAT Rates window. Here's how:

1. Go to the Taxes menu.
2. Under the Tax name column, select RCS.
3. If it's turned off, you can turn it on under the Action column.
   • Note: You can also turn it off and on again to check if this needs to be manually changed. 

Also, when creating transactions, you'd want to make sure to indicate whether it is Inclusive or Exclusive of Tax in the Amounts are section. Just a heads-up, if you've set up your product or services prices on a VAT-inclusive basis, you may want to consider reviewing its price. I'd recommend consulting with an accountant or a Tax Professional so you'd be guided in reviewing your VAT setup. You can read through this article for more insights: Temporary VAT rate reduction due to Covid-19.

I've added these articles to help you manage VAT rates in the system, together with filing and paying your taxes:

• How do I set up sales GST/VAT rates and use them on forms?
• Learn how to file and pay the Tax/GST you owe using QuickBooks Online International version

Get back to us here if you have other questions about managing VAT in QuickBooks. I'm always here to help.