Correct VAT owed

Problem reported by James Stenton 10 years ago

Hi, I set my VAT rate to 20%, thinking I was meant to enter the rate of VAT that is charged. I am on the Flat Rate scheme and the rate I pay back is 12%. I have now changed this on the VAT schemes settings, but how do I get the total on the dashboard owed to HMRC to update to the 12% that is owed on past invoices, rather than the 20% I had originally set it as? Currently the dashboard is estimating I owe £676.98, however when I run the VAT return report it comes out at the correct figure of £406.19.

Many thanks,

James

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1 Reply

Hi James

Since the invoices were created at 20% vat rate rather than the FRS 12%, posting to VAT control account would have been made at the standard rate. By changing it now to 12%, it would correct the vat return but not the postings already made to VAT control account which is the reason for the owing to HMRC showing higher.

You can post a journal to correct this which will then help reflect the dashboard with the correct information.

Debit Vat Control 270.79 and Credit P&L (to the code/codes where the original invoices raised were posted to).

If they were taken to various revenue codes, you can split the credits accordingly.

Once the above is done, the VAT control account will reflect the correct balance.

Hope this has been helpful. If you need further help on this please feel free to raise a ticket.

Best regards

Latha

10 years ago

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