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LTG1
July 14, 2021
Question

Flate Rate VAT rate change 1st year discounted rate

  • July 14, 2021
  • 2 replies
  • 0 views

Hi,

We have been FRS registered for just over a year now and need to increase our FRS rate by 1% as the discounted period has come to an end.  I have attempted to do this by browsing to Taxes > Edit VAT > Edit Settings and entering the increased rate into the % box but I am finding that the increase is applying to all sales in an existing open return which has a start date of 01/06/2021 and an end date of 31/08/2021.  We would like the increase to apply only on sales from 3rd July onwards as this date marks the end of our first FRS year and the start of the non-discounted second year.

 

Is this possible does anyone know?

 

Kind regards

 

Steve.

 

2 replies

S
ShiellaGraceA
July 14, 2021

Thanks for coming by, @LTG1.

 

I'll share some information about applying the VAT increase on a specific starting date. When you edit the VAT rate, you'll have the option to change the effective date. This way, you can select what date you want to start applying the increase.

 

Here's how:

 

  1. Go to Taxes.
  2. Select the Edit VAT drop-down arrow.
  3. Click Edit settings and then Effective date for the new scheme. The Open Transactions column will appear on the VAT report.

 

Want more details? Check out this guide: Set up and edit VAT settings, codes, and rates.

 

If you need help with other taxes tasks, browse this link here to go to our general taxes topics with articles.

 

Please don't hesitate to reply if you still have questions or concerns with taxes. I'll be around for you. Take care and stay safe.

L
LTG1Author
July 14, 2021

Thanks for taking a look and replying  @ShiellaGraceA  When I attempt to change the effective date, vat rate and save the next time I go into settings the effective date has reverted back to the original date of 31/05/2020.

When looking at our open return I can see that the balance has increased as we have increased the vat rate on all sales within the open returns period.

 

Not too sure what else to try other than open a support ticket....

AlexV
AlexV
July 14, 2021

Hello LTG1!

 

Thanks for the reply! Let me further assist you in updating the FRS rate.

 

First, I'd like you to know that the Effective date for new scheme is used only when you change the VAT accounting scheme from Standard to Cash and vice versa.

 

Currently, QuickBooks Online doesn't support FRS rate changes in the midyear or middle of the period. What I can suggest is you use the Bridging Software to file your FRS VAT returns during the periods that are subject to a change if you're on MTD. 

  1. Go to Taxes > VAT > Edit VAT > Edit Settings.
  2. Remove the checkmark on the Flat Rate Scheme (FRS) box. 
  3. Follow the steps in this article on how to use the bridging software: Submit a VAT return through bridging software - MTD for small businesses.

 

This will need a manual calculation to determine what you need to enter on your return. Once done, you can turn the FRS back on.

 

Here are some of the articles you can check. These will show you how to pull up VAT-related reports:

 

Need more help? Leave a comment below and we'll respond as soon as we can. Thanks!

JessT
JessT
September 16, 2021

Hi Steve,

 

I appreciate the additional details. However, I recommend contacting our QBO Support team again for this case. That way, they can continue helping where you left off. They can use a screen-sharing tool for this.
 

  1. Click the Help (?) icon at the top.
  2. Type Talk to a human.
  3. Enter a description of the issue in the What can we help you with box.
  4. Choose I still need a human.
  5. Select the Start messaging option.

 

If you have other questions, you can always go back to this thread.

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