I’ve just realised that one of my invoices included in a vat return from two or three quarters ago charged vat incorrectly at 12.5% instead of 20%. The overall figure was correct but the amount of vat paid to HMRC was too low. Any advice how I can remedy this situation?
Hello @Softley
As it has already been included in a vat return your would need to reverse and re enter the invoice and payment by processing a credit note and refund.
You can then re enter the invoice again correctly with the correct net vat split and pay it off again.
The reversal and re entry will be picked up on your next vat return and the net affect on your bank (of the refund and new payment) will be nil.
Alternately you could enter a manual adjustment on your next vat return to correct the figures HMRC hold.
In particular, for the benefit of future readers, you are specifically not doing anything to modify the original return that you submitted a few quarters ago.
Far too many people on this forum get themselves in a terrible mess by thinking that they have to roll back submitted returns to fix minor errors like this by changing the original return (which you can’t do) rather than just by applying the correction to their next one (which is the way HMRC themselves recommend unless you’ve under-paid VAT by more than £10k).
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Yes, thanks, I think that’s sorted it so that HMRC will be happy.
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