We have an invoice we need to remove. However, the invoice is now locked because the vat returns were submitted. This is the first time doing them via QF. So up until recently, we could always delete/amend. How do we get rid of the invoice?
The easiest solution would be to just issue a credit note. If you really wanted to specifically delete that particular invoice you could roll back the VAT return.
Hi, That’s great. my only concern with adding the credit note is I would still be liable to pay the Vat on a sales invoice we would not have received the funds for.
What VAT scheme are you on?
I am on the MTD pilot scheme. Sorted it out just this month
The Accrual Accounting
Then that is correct - you are liable to pay the VAT to HMRC on any invoice you raised during the relevant quarter regardless of whether or not you’ve been paid. Conversely, you don’t have to pay anything further in the quarter when you receive the payment, as it’s already been dealt with at the invoice date.
If you raise an invoice in one quarter and credit it in the next then you would end up paying the VAT to HMRC in Q1 but then the credit would reduce the VAT you owe for Q2 by the same amount. You’re paying the same total overall, you’ve just handed some of it over sooner than you would if you were on cash accounting.