How to use VAT margin scheme in QuickBooks Online UK

[@miketombs8006]

Thanks Aaron for this really clear (and comprehensive) explanation of how this works.

[@TheQuickBooksChap]

Glad it helps :-)

[@shiblisadiq7262]

Thanks Aaron for the great and clear explanation. Can you share the No VAT Invoice template you prepared?

[@lindaAlb8134]

Thank you Aaron, clear and best tutor video out. Subscribed now and will be following all your new tutorials. QBO used to be good for bookkeeping until they started messing license fees and fired their area managers, I had to kill many licenses because of it, not many clients left there now unfortunately.

[@TheQuickBooksChap]

Hi Linda, thank you for your comments - I know the issues you mean with the area mangers - just shout out if you do have any further issues as my current account manager is brilliant and will be able to help you if needed

[@rebeccabenneyworth6655]

This was very useful and much better than using the 'Adjustments' option on the return. I'm a bit worried that method 3 needs refining - some of my car dealers make the occasional loss on a vehicle and method 3 would then give the wrong result as the calculation would benefit from the loss. But all round a really useful video - thanks very much.

[@TheQuickBooksChap]

Thank you so much for taking time to reply - I have a revised method 3 - just need to get around to sorting out the video - thanks again - love your work

[@anitadymek5908]

@@TheQuickBooksChap did you make the revised video around method 3? I like this method, but same at @rebeccabenneyworth6655 said my client makes occasional loss

[@michaelphillips677]

Hi Aaron found this very interesting I have a client who keeps his stock and invoicing on a separate system, but the invoice might have deposit a part exchange 3rd party financing and even stock finance on the part exchange also deposits might be incremental so it's a bit of a nightmare I have managed splitting the bank receipt between profit on sale and the balance as non vattable plus taking account of the part exchange if any and then dealing with the finance whe it comes in as that could also contain the margin vat, I do all the calculations separately, the other point to remember when using other software for producing invoices is make sure the purchase has been recorded quickbooks as it may have been in stock a while

[@merseysidevansales]

This is a great video for us as a new motor trader trying to get our head around the different options for accounting? I noticed in the comments you had planned on releasing a second, more up to date version of this. Was this ever needed? If so, was it released? Thanks for all your help - new subscriber as of today!

[@susanbaker5366]

Brilliant explanation - thank you Aaron

[@TheQuickBooksChap]

No problems 👍

[@TechFusions]

Hey Aaron- great video! Just found you from watching Retro Reseller!

[@TheQuickBooksChap]

He Tech Fusions! Many thanks, hope the show was useful! :-)

[@wendibatchelor4440]

Hi Aaron, can you explain the vat discrepancy regarding the 16.6% vat or 20% vat on the margin scheme please? Thank you, your videos are a game changer!

[@TheQuickBooksChap]

Hi, VAT should be 20% on the margin scheme, its just that as its on the profit and not the total sales, you may have a different equivalent 👍

[@philsbbs]

Great video might be worth pointing out you cannot do this if you have the online simple subscription.

[@silviab.4610]

Thank you very much for this great video! This is what I was looking for, thank you! Could you please share any tips for partial exemption and flat rate?

[@TheQuickBooksChap]

I have plans for partial and also flat rate Watch this space!

[@silviab.4610]

Thank you for taking the time to answer my question :)

[@louisayallop3237]

Hi. Do you have a video showing how you made the sales invoice which doesn't show VAT which you imported please? Or just an explanation? Thank you, this has been really helpful.

[@TheQuickBooksChap]

Coming soon!

[@pakistani123ish]

Thanks Aaron, could do with a 2021 version I think they have updated it, I'm new to Quickbooks and abit confusing.

[@TheQuickBooksChap]

It’s already on the content list :-) Should be ready early Nov :-)

[@pakistani123ish]

@@TheQuickBooksChap Thank you very much looking forward to it.

[@thedogsdaddy]

@@TheQuickBooksChap Hey Aaron, Do you still have plans for an updated Margin Scheme vid?

[@Dartmotorradengineeringltd]

Hi and thanks for the great video . Can you please give an example or explain this process but from a differrent view ? . I have three transactions on the banking section from a sale wich qualifies in the same vat margin scheme . Product has been purchased from the customer ( this case supplier - retail ) so no vat (the expense is also on banking section) , after preparing the product and advertising it from our behalf the sale has been made with a profit and they are two transactions in the banking section ( one deposit and the rest of collection ) . Your method is great but I just cannot figure it out how to add this transactions in QBO once payment are in banking and how to link correctly the 3 transactions . Thanks

[@wendibatchelor4440]

Hello Aaron, how does this work if you are buying from a vat registered company please?

[@TheQuickBooksChap]

If you are buying from VAT reg companies you don’t need to use the margin scheme 👍

[@V4koz]

What subscription would i need to be able to do this as the simple one dont?

[@TheQuickBooksChap]

Essentials or above 👍

[@CarBoot_Chris]

Hi Aaron, just found you from George’s live. Question. Any idea what’s going on with Quickbooks SE and the PayPal connection at the moment? Up to about 3 months ago I loved QB it made life so much easier and was a great tool. Last 3 months has been horrendous with its PayPal connection. I lost it completely for 2 months and had to reboot it altogether with a risk of losing all my transactions, and probably 4 or 5 times now the connection has failed and QB stops downloading transactions completely for sometimes a couple of weeks, when it starts again there are missing items and I have to manually trawl and enter missing stuff. Also no PayPal fees have downloaded for months so I have to do that manually every month. To be honest I am on the verge of leaving and looking elsewhere. I don’t want to but it’s become so unreliable and it’s wasting a lot of time for me. Any thoughts? Why is it doing this? How can I best deal with it?

[@TheQuickBooksChap]

Hi Cookie & Hayden, it’s all down to a new government legislation called open banking, this has made the connections to the banks (and PayPal) have to be connected in a new way, since the switch the PayPal integration has been a nightmare! They have promised a fix but I would imagine the connection to QBO SE would be later down the line For our clients we have been uploading the the PayPal account manually by downloading the transactions and uploading as a CSV file, it’s not ideal but we are hopefull it’s not for too much longer Personally you might be better off trying the full version of QBO, I can set you up with a 3 month trial period if that helps? The full version won’t remove the transactions if the bank fails, also you have access to a whole App Store that have apps which connect to PayPal in other ways and some even connect with eBay it’s self!! Final option is to outsource the bookkeeping, have a look at my company www.boffix.com and see if it’s useful?

[@CarBoot_Chris]

AppleCore Productions Is there somewhere I can find you to message private?

[@TheQuickBooksChap]

Certainly, email is [e-mail]

[@CarBoot_Chris]

AppleCore Productions Thanks I’ve dropped you an email.

[@MominNz]

What about the VAT payable from the margin scheme less the Vatable business expense?

[@TheQuickBooksChap]

Treat the same as any other standard VAT scheme 👍

[@carpalace55]

how to calculate turnover under margin scheme? Is it on profit ?

[@TheQuickBooksChap]

Margin scheme is based on the margin you make and not VAT on turnover

[@mohammedsaddique9835]

Quick question mate. I'm a reseller on ebay. I have recently applied for VAT. Mainly sell second hand goods so I am eligible for the margin scheme. The question is do I pay the VAT on my profit after fees and postage or right after sale price take profit and pay the VAT?

[@TheQuickBooksChap]

Under Margin scheme - you only account for VAT on the Gross Margin of the items sold 👍

[@UpsideDownFork]

Sounds like you had 2 microphones live during this.

[@TheQuickBooksChap]

Thanks for the feedback

[@spares4you348]

Hi Aaron. I've been told by quickbooks that margin scheme is not supported with quickbooks? I wanted to know to to not show VAT separate on the invoice as it says on HMRC website?

[@TheQuickBooksChap]

It’s not supported official but I show on the video how to archive the result I have an updated video due in the next month 👍

[@CheltenhamVintageToys]

Hey Aaron I also found you from George and Nicks videos. How can I contact you regarding some Tax questions and quickbooks. Many thanks Lee

[@TheQuickBooksChap]

Hi Lee, drop me an email on [e-mail] and we can arrange a call many thanks

[@jjNintendoswitchworldreview]

please help can i ask a question i am an ebayer seller and last year I registered for vat and had to pay the margin vat for buying and selling second hand goods. the last 12 months have been under 85,000....and the last 3 months were only 10,000 in sales if i am vat registered and fall under the threshold do i still have to pay the vat and if so can i claim it back if fell under 85,000 please help I am worried chris I have subscribed and liked

[@TheQuickBooksChap]

Hi - you are able to de reg if you are under the threshold 👍

[@letsdanze6576]

Hi there. Great video. I am on global accounting scheme. I buy bundles of video games on Facebook from public and resell. I'm over vat threshold and have lots of sales, too many to individually account for plus I don't know how much I pay for Individual items. Is quickbooks going to be a useful tool? Is a journal entry my only real option. I've only just gone to Vat and its making me head explode!

[@TheQuickBooksChap]

Yeah QBO can be set up for global accounting as shown in the video - honestly it's my prefered way to run a clients margin scheme if available and QBO runs it well for us

[@patriciaoboyle9841]

@@TheQuickBooksChap ho w did you demonstrate using quick books for the global accounting margin scheme? I did not hear you mention that.

[@FlummoxedCartwright]

Slight problem with this. You're charging 20% VAT on the margin scheme when it should be 16.67%

[@TheQuickBooksChap]

Hi David, its 20% VAT in the UK, hence why we always show everything in 20%, thanks

[@FlummoxedCartwright]

@@TheQuickBooksChap I know it's 20% in the UK. VAT on the margin scheme is charged at 1/6th of the profit or 16.67% From the government website: "VAT margin schemes tax the difference between what you paid for an item and what you sold it for, rather than the full selling price. You pay VAT at 16.67% (one-sixth) on the difference. You can choose to use a margin scheme when you sell: second-hand goods "

[@TheQuickBooksChap]

@@FlummoxedCartwright Hi David That’s why we do the adjustment :-) We can’t predict what the VAT will be, so we charge at 20% and then adjust accordingly Unless it’s the margin scheme where we only charge the 20% on the profit made :-)

[@samjones6095]

How do you adjust it to the 16.67% on QuickBooks?

[@chrisdealer6038]

But the VAT rate is 16.67 % on the margin scheme , not 20%

[@TheQuickBooksChap]

Still 20% vat but on the profit margin not the final sale fee 👍