I’m a sole trader, but not VAT registered. When I’m reviewing my transactions/expenses I’d like to know when to mark them as tax out of scope vs 0% zero rated. Thanks!

It's good to see you in the Intuit Community, chloe84services.

I'll be happy to share information how the tax out of scope vs 0% zero rated used on the sales and purchase forms in QuickBooks Online (QBO).

The 0.00% Z - Zero Rate VAT are use for goods and services that are still taxable, but the VAT rate is charged at 0%. However, there are times the reduced rate only applies in certain circumstances, or it may depend on who the customer is. 

You can expect zero percent VAT on: 

• Children’s clothes and footwear
• Brochure and leaflet printing
• Advertising services for charities 

On the other hand, the No VAT - Out of scope of VAT is use to charge on goods or services that are exempt from VAT or are outside the scope of the UK VAT system. And these transactions will not show on your VAT returns. For more details about the situation with No VAT, see this article:

• Anything you sell or supply when you’re not registered for VAT/or don’t need to be registered for VAT
• Goods or services bought or sold outside of the EU
• Goods or services bought or sold for personal use
• Goods or services bought or sold but not as part of your business 
• Statutory fees and services, like MOT testing 
• Transport tolls for bridges, tunnels, and roads
• Welfare services provided by charities
• Charity Donations 

For more details about the list of common VAT codes that are used on the sales and purchase forms, see this article: VAT codes in QuickBooks Online: A complete guide.

If you have further questions, let me know in the comment section. I'll be happy to answer them for you. Have a great day!