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WindsorGardens
April 10, 2022
Solved

I cannot find a VAT Control account and there is a balance on VAT liability, because no credit entry to clear the debit made when I file my return. Is my set up wrong?

  • April 10, 2022
  • 1 reply
  • 0 views
The problem started when I moved to Quickbooks online from desktop.
Best answer by Adrian_A

Thank you for the additional details, Debbie Davies.

 

I appreciate you for getting back to us.

 

The setting up of the VAT Control account might be the reason why the VAT Liability account has no transactions to be cleared.

 

That said, I'd recommend reaching out to our Phone Support team so we can check the accounts associated with the VAT Control account in a more secure environment.

 

Once everything's good and you're ready to file your sales liabilities, you can pin this article:  Submit A VAT return in QuickBooks. 

 

Keep me posted if ever you need help in filing taxes. The Community is up 24/7 to help you!

1 reply

MaryLandT
MaryLandT
April 10, 2022

Thank you for contacting us today and let me help you locate the VAT Control account, WindsorGardens.

 

The VAT Control account is a default account in QuickBooks. VAT from transactions is posted to the control account.

 

When you mark VAT as Filed in QuickBooks Online, the filed amount is moved from the control account into the suspense account. The amount is held there until you submit your payment to HMRC.

 

You can open the account through the Chart of Accounts. Let me show you how to do it.

 

  1. Go to Accounting from the left menu, then Chart of Accounts.
  2. Type 'VAT Control' from the Filter by name or number box.
  3. Click the Account history to see unfiled tax liabilities.

 

If you've already filed them from the Desktop file, you can make an adjustment to fix the liability balance. Here's how:

 

  1. Go to Taxes and select VAT.
  2. Select Prepare return.
  3. Select Adjust in the VAT line that you want to change.
  4. Choose an Adjustment date and Tax rate.
  5. Select the Adjustment account ▼ drop-down menu and choose an account.
    • If you are making the adjustment because you received a credit and you owe less VAT to the government, choose an income account that you create for this purpose.
    • If you are making the adjustment to include a fine, penalty, or interest on a VAT return, choose an expense account, such as Interest Expense or Non-deductible Penalties.
  6. In the Adjustment amount section, enter the amount of the adjustment.
  7. (Optional) Enter a Memo to describe the adjustment.
  8. Click Save.

 

I'm also adding this article to find out how your books will move from QuickBooks Desktop to QuickBooks Online: Learn how features and data migrate.

 

If you need help filing your sales tax liabilities, here's a guide for you: Submit A VAT return in QuickBooks. It includes other related topics to manage your VAT returns.

 

Stay in touch with me if there's anything else you need about your VAT liabilities. I'm always around to help you.

W
WindsorGardensAuthor
April 10, 2022

Hi Maryland T,

 

Thanks for answering me.

 

Firstly regarding the VAT control account - I've tried looking for it in that way and it isn't there.  I've also tried looking by going to add an account on the off chance that it would appear and it doesn't.

 

As for the problem with the VAT liability account - I think the restricted number of letters online made the problem unclear.

 

I moved to Quickbooks online in July 2018 and that's when the problem started.  I have been preparing and submitting my VAT returns.  When I do, the system debits the VAT liability with the amount payable and the corresponding credit goes to the HMRC VAT Suspense account.  When the payment is made the entry credits the bank account and debits the HMRC VAT Suspense account (clearing the balance).  However, there is not another entry to the VAT liability account to clear that.  I wondered if the problem may be linked to the VAT control account not being present - I'm guessing/hoping that there would be a debit entry to that account with a corresponding credit that would clear the VAT liability account.

 

I have attached a screen shot of my reconciliation which shows that if I take out the debit entries which are made when I file the return then the VAT liability account reconciles. The additional reconciling items include adjustments made by my tax accountant who simply wrote off the balance hiding the issue from me.

 

It may help to mention that I'm a qualified accountant with over 20 years experience not a small business owner so feel free to get technical with any explanations :)

 

Kind Regards,

Debbie Davies

Adrian_A
Adrian_AAnswer
April 10, 2022

Thank you for the additional details, Debbie Davies.

 

I appreciate you for getting back to us.

 

The setting up of the VAT Control account might be the reason why the VAT Liability account has no transactions to be cleared.

 

That said, I'd recommend reaching out to our Phone Support team so we can check the accounts associated with the VAT Control account in a more secure environment.

 

Once everything's good and you're ready to file your sales liabilities, you can pin this article:  Submit A VAT return in QuickBooks. 

 

Keep me posted if ever you need help in filing taxes. The Community is up 24/7 to help you!

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