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lkoups
December 7, 2020
Solved

VAT on purchases

  • December 7, 2020
  • 1 reply
  • 0 views

Hello, our business can only claim back 38% of any VAT we are charged. This causes a problem with quickbooks as there is no easy way for the amount to be tracked using quickbooks.  So we have to use a spreadsheet and upload the figures like that. Has anyone got any ideas as to whether I can get quickbooks to code 38% of 20% VAT on purchases? Thank you!

Best answer by payment after leaving

Thanks- no- we cannot be on the flat rate scheme but I can speak to our accountant about it.

 

I presume there is no way to calculate the 38% via quickbooks?


Hi lkoups We recommend that you contact an accountant as this is not a calculation that is directly supported by QuickBooks. 

1 reply

MarsStephanieL
MarsStephanieL
December 7, 2020

Hi there, @lkoups.

 

I'd be happy to show you how to add Tax rate of 38% on VAT Purchases.

 

After setting up your VAT settings, you can also add a Tax Rate in the Sales Tax Centre. You can refer to the steps below.

 

  1. Go to the Taxes menu and select the Add tax button.
  2. Choose Tax rate.
  3. Enter the details of the following:
    • Tax name
    • Description
    • Tax agency section to Purchases
    • Purchase Rate to 38%
    • Account to Liability or Expense (Note:  If you want VAT to only show on your transactions and reports, select 'Expenses' in the Account field when editing your VAT settings. If you want VAT to show on the VAT return, choose 'Liability').
    • Show net amount on return line section.
  4. Select Save.

 

I've also added some screenshots for additional reference.

 

 

Once done, you may apply the added VAT rate on the purchases you're going to make. Here's a sample Bill transaction to see where you can enter the rate:

 

You may consider checking this article for your future reference in case you want to correct some errors on your past VAT returns: Adjust your VAT liability. 

 

I'll be here if you have other questions regarding VAT in QuickBooks. It would be my pleasure to help you. Have a wonderful day ahead.

L
lkoupsAuthor
December 7, 2020

Thank you- however I think that you may have misunderstood me- so I need to calculate a rate that is 38% of 20%.

So if someone charges us £1000 plus 20% VAT that is £200 in VAT (total £1200)

But we can only claim back 38% of this VAT amount which is £76

 

I want QuickBooks to calculate the £76 in VAT but if I choose 7.6% then the bill above comes out at 

£1000 plus £76 which is £1076 not the £1200 that was charged to us.

 

So it gets tricky..

 

??

JoesemM
JoesemM
December 7, 2020

Thanks for getting back to us, @lkoups.

 

Allow me to jump in and share additional details.

 

Are you registered as a Flat Rate Vat Scheme? If so, you can set up the FRS VAT and enter the correct percentage from there. Once you use it, you pay VAT as a fixed percentage of your VAT inclusive turnover. The actual percentage you use depends on your type of business. Let me guide you how:

 

  1. Go to Taxes in the left navigation pane, then choose Add Tax.
  2. In the What type of tax do you want to add? page, choose Custom Tax.
  3. From the Tax name field, enter a relevant name, such as Flat Rate.
  4. Enter other necessary details.
  5. Put a checkmark in the This tax is collected on sales box.
  6. Enter the percentage amount in the Sales Rate box.
  7. Click Save.

 

You can read through these articles for more insights about how the VAT rates work in QuickBooks:

 

 

Feel free to tag my name if you need further help. I'd be glad to help. Take good care!

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