I am new to quickbooks so i am looking for help .
I am currently looking at quickooks P and L from a new customer and i noticed there is an expense line called " HM Revenue and Customs VAT Expense " - which accumulates all the VAT on purchases and on the balance sheet , there is VAT Control and VAT suspense. I know that all transaction in QBO are posted to the VAT control accounts and when the vat return is prepared the VAT is transferred to the Suspense account to be cleared. I know VAT should not be shown on the PL ( perhaps am wrong) so i am wondering why every expense transaction is posting to this VAT account expense line. the client has no clue either....
Have they created this account wrong? or am i missing something ? How does quickbooks deals with VAT ?
any help would help.
Replies (8)
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Could they be on the cash basis? https://www.gov.uk/simpler-income-tax-cash-basis/vat-registered-businesses
Do you submit the VAT in QB?
Once submitted in QB the balance is transferred to VAT A/c in the balance sheet as a creditor.
a couple of points
1) who set it up as it is, maybe they misunderstood
2) if on FRS savings go to P/L so its entirely possible