If you only now have corrected your VAT settings then invoices you’ve entered since will be correct, you will probably need to go back into any invoices you entered before you made the changes to make sure the VAT is correct on those
Have you already submitted any VAT returns under normal VAT that should have been flat rate? If not then it should just be a case of turning the flat rate setting back off again temporarily and then going back over your purchases and removing any VAT you’ve itemised on those (make the net column equal to the vat-inclusive total). Your sales invoices should already be correct as even when you pay VAT to HMRC on a flat rate basis you still charge your customers the normal net-plus-20%.
If you have already submitted one or more returns as normal VAT which should have been flat rate then you’ll need to make some sort of adjustment on your next return to correct for the difference between what you should have paid and what you actually paid - definitely talk to an accountant on this as I’m not sure about the rules around whether this counts as a “careless” error you should report separately to HMRC.
That said, as a “limited cost trader” you may find you’re better off not on flat rate anyway, unless you have zero or almost zero purchases on which you’ve paid VAT. If you were paying over the full 20% VAT and not reclaiming anything on purchases then that’s equivalent to paying a flat rate of 16.67%, it doesn’t take much in purchase VAT reclaims to push that below 16.5.
@QFBeth I haven’t changed the setting in QF yet. It’s an active account, so I wanted to find out what it would do before I changed anything. As per @ian_roberts comment, existing sales invoices shouldn’t be effected, as they were charged at the normal 20% VAT.
@ian_roberts Yep, you guessed it, I have already submitted a few returns using the Standard rate - doh!! I’m just wondering how such adjustments are handled in QF?? For instance, should I manually adjust the existing VAT journals QF created or will QF adjust them retrospectively, because the ‘Vat Filing Start Date’ is what it was when I began using QF?
I’m particularly nervous, because the account is connected to HMRC/MTD and I don’t want to make an even bigger hole for myself… I will contact HMRC directly, but haven’t been able to get through to them yet (service was down at the weekend, so guessing there’s a backlog).
You’re probably right about that, but I understand you can’t chop and change at will, so I’ll have to dig myself out of this little hole before deciding whether or not it worth sticking with. TBH ‘sole trader’ is looking more appealing right about now - not sure Ltd & VAT reg is worth the hassle.
Anyway, live & learn - so any help is greatly appreciated
To be honest it might be worth consulting with an accountant to make sure that any adjustments you have to make are correct. You may just be able to adjust your next return to accommodate the mistakes in the previous returns