We operate cash accounting for VAT
We mistakenly duplicated a supplier’s invoice, only paid the supplier once yet in an honest error claimed (and received) the VAT twice.
What’s the best way of paying the VAT back (adding the VAT into our payment liability) for the next period?
Credit note the duplicate purchase in full - presumably as you say you only actually paid the supplier once, then the duplicate purchase is sitting there as unpaid, so the credit in full should be all you need to do. It will reverse off your P&L now and be accounted for by reducing boxes 4 and 7 on your next VAT return.
Just found that I marked it as paid via the director’s loan account meaning both the actual invoice and the duplicate are part of a previous VAT reclaim and marked as “locked”?
In which case, when you credit note the duplicate mark it as refunded back to the same director’s loan account to balance everything up.
Basically, once you have reported something on a vat return, even if it was in error, you cannot (and should not!) delete the original erroneous item, rather just reverse its effects on the next available return.
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