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PGVicky
Apr 26, 2020 11:47 AM UTC
Question

Chart of accounts

Hello,

 

I've recently changed from quickbooks from sage and I'm a bit confused about having a VAT code for a nominal account. Can anyone explain how that works? For example, if I were to assign the 20% tax code to auto expenses but then received an invoice for an MOT, which is exempt from VAT, what would happen? 

1 reply

JonpriL
Apr 26, 2020 2:17 PM UTC

Hello @PGVicky,

 

VAT is calculated only within those transactions with VAT codes assigned to them. If an expense has a VAT code yet the invoice has not, VAT is only calculated within the expense created.

 

In addition, here's an article you can read to learn more about VAT and its function: Common VAT Codes.

 

Lastly, I've got you the following articles below for additional references about VAT and its codes: VAT for QuickBooks Online.

 

If there's anything else that I can help you with, let me know in the comments. I'll be happy to help.

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