Solved

Accounting for VAT payments

5 replies
0 views

I am a business that is not registered for VAT and as such have made VAT payments on import of inventory purchases.

Should VAT be accounted as a Cost of Goods Sold or as an expense?

QuickBooks Online

Hi billygreenway You could create a specific cost of goods account for the VAT element of the transaction. As we're not accountants any information that we provide should be qualified by a professional. There may however be an accountant/professional here on the Community that you provide you with further advice.

A

Ashleigh1

Hello Billygreenway,

Welcome to the Community page,

So it is an expense as you have brought the item and have imported it.

B

billygreenwayAuthor

Why is it not cost of goods sold? Since if I bought an item that included VAT and then resold it then it would count as a cost of goods sold?

P

payment after leavingAnswer

Hi billygreenway You could create a specific cost of goods account for the VAT element of the transaction. As we're not accountants any information that we provide should be qualified by a professional. There may however be an accountant/professional here on the Community that you provide you with further advice.