We are a VAT registered company and have made monthly payments of £50 to a supplier since November 2015. The supplier is logged as a VAT registered supplier in our system, but this is incorrect. Is there a correct way to adjust the past payments for VAT purposes?
kind regards
Sue
Are we talking about £50 plus vat or including vat?
When you file a VAT return from HMRC you will always have the option to make manual adjustments to the boxes. If you know the amount of VAT overstated you can simply adjust accordingly.
You need to adjust your nominal and vat purchase control a/c too
If you apply a VAT only refund to the account wouldn’t this adjust everything automatically?
You’d need to do 2 lines I suppose;
Refund to the supplier of the VAT content and also an adjustment of the same amount with no VAT to bring the total supplier balance back to the correct level?
Mark supplier as non-VAT registered and then just carry on.
Lets assume the £50 was the amount paid and it was 13 months of errors (Nov to Nov)
That totals £650, consisting of: £541.67 net plus £108.33 vat (over claimed vat)
First I would use the current Dec invoice for £50 and edit it to show £50 with £0 vat,
(or create the Dec invoice for that supplier)
Then add 2 new lines, (named previous vat error correction)
One line with a minus £108.33 vat only, (£0 net, -108.33 vat, -108.33 total)
and,
One line for a plus £108.33 with zero vat. (£108.33 net, 0 vat, 108.33 total)
These two new lines will total zero (cancel each other out) so will not affect the current invoice and will correct the vat record.
after completing this save the invoice then change that supplier to a non vat reg company
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