These instructions apply to you if you have QuickBooks Release 3 or higher. To check the release number, in QuickBooks press F2 and reference the Product line. It is recommended that you update QuickBooks to R3. To update QuickBooks, from the Help menu select Update Quickbooks, and then click Update Now.

This information applies to those who:

• currently use QuickBooks 2004, 2005, or 2006
• report VAT on an accrual basis (standard VAT scheme)
• use QuickBooks' File VAT feature (including for your most recent completed VAT period)

Important: If you used the Multicurrency feature, you cannot upgrade to QuickBooks 2008. Tell me more.

Open your company file in your current version of QuickBooks:

1. From the Reports > Accountant & Taxes menu create and print a Trial Balance report as of today's date. Write "Pre-upgrade" on it. Note down the balance on the VAT Control Account.
2. Create a VAT 100 report as of today’s date. Print the report and write "Pre-upgrade" on it.
3. Verify that the balance on the VAT Control Account agrees to the balance in Box 5 of the VAT 100 report. If you have been filing VAT correctly, both figures should agree.

If these amounts do not match, it could mean that you have either underpaid/overpaid your VAT. You should reconcile the VAT Account first or seek the assistance of your accountant in reconciling the account. If you choose to continue upgrading, QuickBooks will create a General Journal Entry in your upgraded company file which will adjust your VAT due in the next period. Therefore it is important to consult your accountant before proceeding.

4. Close your company file and QuickBooks.

After the installation of the product is complete, you should download all product updates to ensure that you are on the latest release of the software. You can do this by going to the Help menu and selecting Update QuickBooks. You will need to shutdown and re-start QuickBooks for the changes to take effect.

1. To start the upgrade process for your company file, go to the File menu and select Open or Restore Company.
2. Click Open a company file and click Next.
3. Browse and find your company file (the .QBW file that you just closed) and then click Open.
4. Follow the onscreen instructions.

In your upgraded company file:

1. From the Reports > Accountant & Taxes menu create and print a Trial Balance report from the first day of your current VAT period to today. Label the Report "Post-upgrade".
2. Go to the new VAT menu:
   • Click VAT 100 Report.
   • In the From date field enter the first day of your current (not yet filed) VAT period.
   • In the To date field enter today's date.
   • Click Refresh at the top of the report.

   Print the report and write "Post-upgrade" on it.

3. Verify that the balance on the VAT Control Account agrees to the balance in Box 5 of the VAT 100 report. If you have been filing VAT correctly, both figures should agree. In the event that Box 5 of the VAT 100 does not agree to the VAT liability account, please continue with the remaining steps. It means there are amounts that QuickBooks could not categorise either to Sales or purchase VAT (examples are Opening balance journals, Make Deposit entries, journals that have purchase items with N code VAT).
4. You can view transaction details of the Uncategorised Tax Amounts by going to the VAT Detail report and changing the ‘From’ date to an earlier month or year.

How do I resolve uncategorised tax amounts?

5. Compare the figures in Boxes 6 and 7 of your pre and post upgrade VAT 100 reports.

Once you've successfully upgraded your company file continue to use the File VAT feature to remit VAT or receive your VAT refunds.