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TimWh0
October 17, 2022
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Creating custom VAT code to appear on box 6 only

  • October 17, 2022
  • 1 reply
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Hi, one of our clients is making sales exports outside of the UK & EU, so the VAT treatment is outside the scope and so No VAT but I still want the sales to pull through to box 6 on the VAT reports. Is there any way to create a VAT code that just pulls the sale through to box 6 without pulling the sale through to box 1 or 2 as well? or will this have to be shown through adjustments on the VAT return? I have tried creating a custom VAT code but this will add VAT of 0.00 to box 1 or 2 as well as the net going to box 6. 

Thanks 

Best answer by ChristieAnn 11

Hi there, TimWh0.

 

Thank you for visiting the QuickBooks Community. Let me discuss how VAT codes work in various boxes. Then, ensure that you're able to manage your VAT return by organising your code smoothly.

 

Transactions are reported to the different boxes on the VAT return depending on the tax codes that are assigned to them. With this, the standard VAT rate in the UK for most goods and services is currently 20% and falls to Box 1 and Net Sale to Box 6. 

 

Also, goods and services that are categorised as 0% or zero-rated VAT are still taxable but the VAT rate is charged at 0%. Sometimes the reduced rate only applies in certain circumstances, or it may depend on who the customer is. That being said, you can expect zero percent VAT on Children’s clothes and footwear, Brochure or leaflet printing, and Advertising services for charities. Then, this VAT 0% is to Box 1 and Net Sale to Box 6.

 

Additionally, some of the most common codes that are reported under Box 6 are Exempt and Zero rate VAT. I recommend making sure that the transaction is Exempt so it will fall directly to Box 6 and as mentioned above creating a custom VAT code isn't necessary. You can open this article to see further details: VAT codes in QuickBooks Online: A complete guide.

 

Furthermore, I also recommend consulting an accountant for additional guidance on managing your VAT transactions. This way, you're able to make sure that your VAT return stays accurate.

 

Lastly, you may refer to this article to see steps on how you can hide tax rates and turn off VAT: Set up and edit VAT settings, codes and rates in QuickBooks Online.

 

Please don't hesitate to click the Reply button below if you have other concerns related to VAT codes and returns. I'm always here to help.

1 reply

paul72
paul72
October 17, 2022

Hi @TimWh0 

 

You're on the right lines - you have to have 0% going to Box 1 (Sales & Other Outputs).

As 0% is always £nil, the effect on the VAT owed is £nil.

 

There's no real need to create a custom code (Exempt or Z=0% have the correct effect on the VAT Return).

I have a custom code for Exports & Imports - purely to pick them out in reports.

 

Hope this helps.

C
ChristieAnn 11Answer
October 17, 2022

Hi there, TimWh0.

 

Thank you for visiting the QuickBooks Community. Let me discuss how VAT codes work in various boxes. Then, ensure that you're able to manage your VAT return by organising your code smoothly.

 

Transactions are reported to the different boxes on the VAT return depending on the tax codes that are assigned to them. With this, the standard VAT rate in the UK for most goods and services is currently 20% and falls to Box 1 and Net Sale to Box 6. 

 

Also, goods and services that are categorised as 0% or zero-rated VAT are still taxable but the VAT rate is charged at 0%. Sometimes the reduced rate only applies in certain circumstances, or it may depend on who the customer is. That being said, you can expect zero percent VAT on Children’s clothes and footwear, Brochure or leaflet printing, and Advertising services for charities. Then, this VAT 0% is to Box 1 and Net Sale to Box 6.

 

Additionally, some of the most common codes that are reported under Box 6 are Exempt and Zero rate VAT. I recommend making sure that the transaction is Exempt so it will fall directly to Box 6 and as mentioned above creating a custom VAT code isn't necessary. You can open this article to see further details: VAT codes in QuickBooks Online: A complete guide.

 

Furthermore, I also recommend consulting an accountant for additional guidance on managing your VAT transactions. This way, you're able to make sure that your VAT return stays accurate.

 

Lastly, you may refer to this article to see steps on how you can hide tax rates and turn off VAT: Set up and edit VAT settings, codes and rates in QuickBooks Online.

 

Please don't hesitate to click the Reply button below if you have other concerns related to VAT codes and returns. I'm always here to help.

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