How To Change VAT in Quickbooks Desktop

How to Change VAT from 15% → 15.5%

To change a VAT rate in QuickBooks Desktop, you must create a new VAT item with the revised rate and then mark the old one as inactive, as existing rates cannot typically be edited directly. 

Step-by-Step Guide

1. Login to your Quickbooks Desktop company using the admin login details
2. Create a New VAT Item: 
   • Go to the Lists menu 
     • Select Item List.

• Right-click anywhere in the list window and select New (or use the Item button at the bottom of the window).
• In the New Item window, select Sales Tax Item from the Type dropdown.
• Enter a new Tax Name that clearly identifies the new rate (e.g., "Standard VAT 15.5%").
• Enter the new Rate (e.g., 15.5%).
• Enter the Tax Agency (the government body you pay the tax to).
• Click OK to save the new item. 

2. Mark the Old VAT Item as Inactive: 

• Go back to the Item List.
• Locate the old VAT item that is no longer in use.
• Right-click the old item and select Make Item Inactive. This ensures it cannot be selected for new transactions but preserves historical data.

3. Update Default Settings and Templates:

• For new sales transactions
  • When creating a new invoice or sales receipt, ensure the correct new VAT item is selected in the relevant tax field.
• For customers
  • You can set a default tax code for individual customers by editing their profile in the Customer Center and going to the Sales Tax settings.
• For items
  • Ensure your products/services in the Item List have the appropriate new VAT code assigned.
• Templates
  • If you use custom invoice templates, verify that the sales tax fields are correctly referencing the active VAT items. 

By following these steps, you will correctly implement the new VAT rate for all future transactions in QuickBooks Desktop. 

For specific guidance, you can refer to the official Intuit QuickBooks support resources or your local tax authority, such as GOV.UK if applicable to your region.