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boltsmechanic-gm
May 30, 2022
Solved

Should I add vat on expenses when I am not vat registered ?

  • May 30, 2022
  • 1 reply
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I have been adding vat that I have payed on my expenses, however I have noticed it's not showing when I do my monthly expense report, i.e I pay a subscription of £11.99 but only shows I have payed £9.99
Best answer by RoseJillB

Welcome aboard to the Community space, @boltsmechanic-gm.

 

You can manage your VAT when creating transactions in QuickBooks Online. Also, you have the option to keep track of it in both purchases and sales.

 

To begin, you must enable the VAT option in QBO. Here’s how:

 

  1. Click Taxes.
  2. Click Set up VAT.
  3. Enter information needed.
  4. Click Next.

 

Regarding adding VAT without being registered, when creating a sales transaction that does not include VAT, you can select NO VAT as the option so that it does not appear on your VAT return.

 

Here are the steps on how to use the No VAT option in your sales receipt:

 

  1. Click the Plus (+) icon.
  2. Choose Sales Receipt.
  3. Under Amounts are, choose No VAT.
  4. Enter information needed.
  5. Click Save and Close.

 

In addition, here’s an article that you can refer to when setting up and editing VAT settings, codes, and rates in QBO.

 

Don’t hesitate to drop a comment if you have additional questions about taxes. Stay safe!

1 reply

R
RoseJillBAnswer
May 30, 2022

Welcome aboard to the Community space, @boltsmechanic-gm.

 

You can manage your VAT when creating transactions in QuickBooks Online. Also, you have the option to keep track of it in both purchases and sales.

 

To begin, you must enable the VAT option in QBO. Here’s how:

 

  1. Click Taxes.
  2. Click Set up VAT.
  3. Enter information needed.
  4. Click Next.

 

Regarding adding VAT without being registered, when creating a sales transaction that does not include VAT, you can select NO VAT as the option so that it does not appear on your VAT return.

 

Here are the steps on how to use the No VAT option in your sales receipt:

 

  1. Click the Plus (+) icon.
  2. Choose Sales Receipt.
  3. Under Amounts are, choose No VAT.
  4. Enter information needed.
  5. Click Save and Close.

 

In addition, here’s an article that you can refer to when setting up and editing VAT settings, codes, and rates in QBO.

 

Don’t hesitate to drop a comment if you have additional questions about taxes. Stay safe!

H
happyasharry
February 11, 2025

Similar to this question (because I am not VAT registered), I purchased a monitor at £99.99 (before VAT), VAT amount is £20, and total amount payable is £119.99. 

 

So am I right to input the following in QuickBooks? 

- Column "Total before sales tax" = £119.99 

- Column  "Sales tax" = 0 

- Column "Total" = £119.99

 

Please see the screenshot to see what I've done. 

 

I'm unsure if the columns "Total before sales tax" and "Total" should be as above or £99.99 and £119.99, respectively. 

 

Many thanks, 

Harry 

 

S
Sherrie_F
February 11, 2025

Hey there, Harry. Thanks for joining the thread and detailing your concerns about accurately applying VAT to your transactions.

 

Yes, you're on the right track. Since you paid £119.99 for the monitor (which includes VAT), you should indeed enter £119.99 in both the "Total before sales tax" and "Total" columns. The "Sales tax" column should be marked as zero since you’re not reclaiming or accounting for VAT separately.

 

As you are not VAT registered, the best practice is to record the total amount paid (including VAT) as your expense. This accurately reflects the actual cash outflow associated with the purchase of your monitor.

 

Here's how to record it in QuickBooks Online (QBO):

 

  1. On the + New icon, look for Expenditure.
  2. Choose No VAT under Amounts are.
  3. In the Total before sales tax column, input the total £119 amount you paid.
  4. Set the Sales tax column to 0, as you're not claiming back any VAT.
  5. The Total should also be £119.99, matching the Total before sales tax.

 

You're managing everything correctly. Therefore, the 'Sales tax' as 0 and both 'Total before sales tax' and 'Total' the same are the correct steps. This is a common scenario for businesses or individuals who aren't VAT registered, so you're definitely on the right path.

 

This method ensures your accounts reflect accurate expenditures without the need to separate VAT, simplifying your financial reporting since you are not dealing with VAT reclaim procedures.

 

Additionally, I’ve attached an article that provides detailed instructions and tips to ensure you handle VAT efficiently and accurately within your QuickBooks account: Pay and manage VAT in QuickBooks.

 

It's been a pleasure assisting you with your VAT management. Should you have any further questions or require additional support navigating QuickBooks, please don't hesitate to reach out at any time. I'm here to help ensure everything runs smoothly for you. Wishing you great success in your financial endeavors. Take care, Harry!

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