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NickH2
January 26, 2026
Question

TAX & Square Payment systems

  • January 26, 2026
  • 1 reply
  • 2 views

Hi Has anyone come across this problem before? if so any ideas how to resolve it.

 

We are coffee shop with multiple tranctions each day, which include VAT, we use connector app to move the tranactions into QB, where the tax is recorded. At the end of each day, the consolidated payment comes throuigh from square, less thier chargesa nd is recorded in QD. When i try to prepare my VAT return, the amount is correct - calculated from the individual tranactions, but the consolidated payments from Square sit on teh exception report without VAT. If i change the VAT code, they get added into the vat amount and push it higher than it should be, on paper it looks like are avoiding tax on these consolidated receipts?

 

Any ideas how to resolve?

1 reply

C
ChristineJoieRQuickBooks Team
QuickBooks Team
January 26, 2026

Hello there, NickH2. I appreciate your reaching out regarding your Square payment and VAT accounting issue.

 

Since the individual transactions are calculating VAT correctly, the discrepancy lies in the consolidated payments coming through from Square. These payments often appear without VAT because they are deductions of net amounts calculated after Square fees.

 

To resolve this, we can exclude the consolidated Square payment transactions recorded in QuickBooks from VAT reporting to avoid duplication.

 

Next, we can manually add these transactions as Sales Receipts in QuickBooks and use the corresponding VAT codes tied to the original transactions to ensure accurate VAT reflection.

 

Here's how:

 

  1. Go to the QuickBooks Online dashboard.
  2. Navigate to + New and click the Sales Receipt.
  3. Enter the transaction details matching what Square consolidated:
    • Customer name
    • Date of the transaction
    • Payment method
  4. Add the products or services sold, making sure to use the same VAT codes that apply to the original Square transactions (e.g., standard rate, reduced rate, zero-rated).
  5. Ensure the total amount and VAT amounts align with your Square reports.
  6. Click Save and Close.

 

Additionally, if you need assistance with managing your consolidated transactions and determining the appropriate categories to use, I recommend consulting your accountant for expert advice.

 

Please add a response below if you need any further assistance on this topic, NickH2.

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