Updating the GST Rate in Quickbooks & Simply Accounting
Published July 2006
Regardless of which program you use, the following tax rates are effective July 1, 2006:
| Tax | Code | New Rate | Former Rate |
| GST | G | 6.0% | 7.0% |
| Harmonized Sales Tax | H | 14.0% | 15.0% |
| Standard - GST | S | 6.0% | 7.0% |
Julia Germain, a Quickbooks Advisor with Ask The Accountant Inc. submitted a short explanation of how to update the tax rates in Quickbooks. Do not change this rate before at least effective your July 1st invoicing.
- Open Quickbooks
- Click on Lists in the main Quickbooks menu
- Select Tax Code Lists from the drop down list
- Next you need to edit the rates for GST (G), Harmonized Sales Tax (H), and Standard (S). To do this you right click on the letter for each rate and select Edit from the drop down list. Once you are in edit mode simply change the rate to the number you want, for example change 7.0% to 6.0%. Click okay once you have changed the rate. The following chart shows the rates you need to update.
Please note that when you update the codes in Quickbooks historical invoices will not be affected. You will also need to update any custom codes you may have created yourself. For example, if you have a tax code set-up for meals and entertainment, you will need to change the rate from 3.5% to 3.0%.
Changing tax rates in Simply Accounting
To change the tax rates in Simply Accounting do the following:
- Open Simply Accounting
- Select Setup > System Settings
- Select Sales Taxes from the drop down list
- A Sales Tax Information will now appear. Select the Tax Codes tab.
- You are now ready to change the tax code for each rate that uses GST. To change a code, for example GST (G) select the code and double click it. This will bring up the Tax Code Details page. Simply change the rate and click ok.
- In Simply Accounting the tax rate is often including in the description field for the tax, so you will need to edit this as well. To do this click on the description field, enter the new rate and click ok.
- As a final step, Simply Accounting recommends that you enter a sample invoice and check to ensure that the correct rate has been applied.
To learn how to change the tax rates in Simply Accounting you can view their online demo.
Paying invoices - check for correct information
It is advisable to check incoming invoices to ensure that you are being charged the proper amount of tax.
Julia Germain notes, "If your vendors give you bills dated after July 1 2006 still charging the 7% GST – ask them to reissue the invoice with the correct rate. Do not correct it internally. Ask for the proper documentation to have in your file in case of audit." She goes on to explain that she will go so far for my vendors to refuse to pay until proper documentation is presented.
Also, vendors should clearly indicate their business number on invoices where GST is charged.
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