Forum Message

VAT

Hi Mark,

We incorrectly invoiced a customer for VAT @ 15% when it should have been 5% this invoice has already been paid. My question is this; if I issue a credit note for the overpayment (£1155.00) this will not reset the VAT to the correct amoumt. How can I record this. Also this overpayent has aready been paid to HMRC and will need to be corrected in my next return. Advice please.


Posted by Peter Smith on Nov 19, 2009 10:14 AM GMT

Hi John,

Create a Credit Note with two lines:
Line 1: £11,550 at 15% VAT
Line 2: -£11,550 at 5% VAT (note: amount is negative).

Then issue a refund to your customer for £1,155 as described here:
http://www.solaraccounts.co.uk/help/how-to-pay-a-customer-refund.php

This will reduce the Box 1 figure on your next VAT return by £1,155

Cheers,


Posted by Mark McLaren (Solar Accounts) on Nov 19, 2009 11:40 AM GMT