When I go to file my VAT, the File VAT window is telling me that my return is NOT ready to file.

Why is this happening

QuickBooks has detected that you have VAT transactions that are unreported or unpaid. What this means is you have transactions that do not have a VAT code associated with them (or a transaction was modified AFTER you filed your VAT).

As a result, QuickBooks identifies these transactions as 'unreported' or 'unpaid'. These amounts should be corrected before your next filing period.

Watch this video to show you how to resolve these amounts.

You can choose to

• Investigate & Resolve the over/underpayment of VAT: this option takes you through a series of steps to determine where the VAT errors came from.
• File Return: this option includes the VAT over/underpayment in your return now. QuickBooks then creates a general journal entry to move the unreconciled balance from the VAT account to the Accounts Receivable or Accounts Payable account.

Investigate & Resolve

If you want to understand where QuickBooks detected transactions that had no VAT codes assigned or transactions that were modified in filing period for which you'd already filed, click Investigate & Resolve. You are then presented with a window to help guide you with this process. Click Next to begin the process.

1. Investigate the period with errors. Click the 'View the VAT Filing Discrepancies by Period Report' to see which filing periods contained the VAT errors.
2. (optional) Dig Deeper... Use the suggestions in this section to help you determine the root cause of the VAT errors.
3. Click Next.
4. Adjust outstanding VAT. To resolve your VAT over or underpayment:
   1. Select from one of the options displayed. Choose the 'Make a lump sum...' option for smaller VAT amounts (less than 200 pounds). We recommend you consult with your Accountant before selecting a choice.
   2. Before continuing, print a copy of the VAT Filing Discrepancies by Period Report. Link to report is included on this window.
   3. In the table, in the Amount column, enter the amount of the VAT over or underpayment.
   4. In the Adjustment Options column, select from the following options:
      • Amount is not VAT - Move to Income... select if this was a data entry error (i.e., is not VAT at all) that should be reassigned to an income account.
      • Amount is not VAT - Move to Expense... select if this was a data entry error (i.e., is not VAT at all) that should be reassigned to an expense account.
      • Pay or claim now with VAT Form 652... select if the amount of the over/underpayment of VAT is over 10,000 pounds. You need to also notify HMRC using VAT Form 652
      • Adjust VAT due on Sales... select if the VAT error was related to VAT collected on sales. In the Adjustment Details column, QuickBooks automatically calculates your NET sales amount including this new adjustment, and will adjust your VAT on your NEXT file return.
      • Adjust VAT reclaimed on Purchases... select if the VAT error was related to VAT collected on purchases. In the Adjustment Details column, QuickBooks automatically calculates your NET purchase amount including this new adjustment, and will adjust your VAT on your NEXT file return.
         
5. Click Next, confirm the adjustment details and click Next again.
6. Make a back up of your company file.

After you convert your company file to the new version of QuickBooks, QuickBooks may detect an over or underpayment of VAT from your previous company file.

If this is the case, the Upgrade Centre tells you to adjust for VAT overpayment or underpayment. You can choose to resolve this now by clicking the 'Recalculate your historical VAT' link on the Upgrade Centre.

If you wait until later, QuickBooks will ask you to resolve these over/underpayment VAT amount before you file your VAT return.

Watch this video to show you how to resolve these amounts.

If you see an 'Amount not assigned a line on VAT return' and you make instalment payments, refer to this faq on how to resolve this amount.