I have an incorrect payment (too large) allocated to an invoice in a previous quarter’s VAT, so the payment and invoice is locked. This has led to the box 6 on my VAT return being overstated and my bank account is different to QuickFile by this amount.
I think I need to create a “negative payment” (i.e. a payment from my current account, rather than a receipt) and allocate it to the invoice. This would then correct everything with my VAT return for this next quarter automatically correcting the previous quarter. BUT, QuickFile does not allow negative payments, and if I create a payment from my current account QuickFile doesn’t offer for me to tag the transaction to an invoice. So how do I make the correction?
Incidentally, this problem arose because I am invoicing in Euros and always receive a different sterling amount to that expected by QuickFile when the client pays in full due to currency exchange charges by my bank. The problem is that I have to enter the amount actually received and to tick the “Payment in Full” box on the payment received box on the invoice - BUT I have to do the tick first, otherwise QuickFile overwrites the actual amount I entered! I fell foul of this!
Can I simply raise a Credit Note for the overpayment amount (but not send it to the customer), allocate that to the invoice, and let the next quarter’s VAT return amend the previous error? This should bring the QuickFile current account into line with my bank account too.
I tried the Credit Note, as above. I had to calculate the amount of credit as I only see the amount in sterling, but I have to raise the CN in Euros to allocate it to the invoice which was in in Euros. It corrects the bank account, and payments should be corrected OK, but the VAT return (draft, not submitted yet) has not taken account of the CN into box 6. I could apply a manual correction, but I am concerned that QuickFile has not picked this up automatically.
The invoice and incorrect payment tagged were in the previous VAT period and the invoice is locked. The Credit Note and its tagging to the invoice have just been done and fall in a subsequent VAT period to shortly be returned to HMRC. I want to make sure the CN is the correct way to proceed, but am concerned the draft VAT return generated by QuickFile does not include the CN, so does not have a correction in box 6. I can do this correction manually to the VAT return, but am worried that perhaps I am not properly correcting the previous error.
credit the original invoice in full, and when you save the credit note make it refund from the same bank account on the same date and same GBP amount as the locked payment
create a new invoice as a copy of the original one (with the original date), and log the correct payment with the accurate GBP amount against the new invoice, with the payment backdated to when you originally received the money
This should apply the appropriate corrections to the VAT return since any payments dated in a previous quarter but not locked will automatically be pulled into the next return. You’ll end up with a couple of ghost transactions on the bank account with the incorrect amount showing as in and then out on the same day but the end of day bank balance will be correct.
