Correct transactions included on a VAT return

This explains what to do when to edit or delete a transaction included on VAT return.

If you've made a mistake and need to change something after you have submitted the VAT return, you must reverse the transaction and re-enter it with the updated details.

For Draft VAT returns, when you haven't yet submitted the VAT return, delete the draft VAT return and then amend or delete the transaction.

How this works

Once you include a transaction on a VAT return, you cannot delete or edit it.

Having an incorrect transaction can mean that

  • Your bank account balance is not correct

  • The balance of your customer supplier account is not correct

  • Your VAT return is not correct and you may overpay or underpay VAT

To make the necessary adjustments, you must

  1. Create a reverse or opposite transaction. This effectively cancels out the value of the incorrect transaction.

  2. Re-enter the transaction with the correct details, if required.

You enter a payment for €120 for some office supplies twice by mistake. You don't notice this straight away and it's now included on a VAT return.

  • Your bank account balance is now €120 less than it should be.
  • You've declared an additional €20 on your VAT return.
  • When you report on office supplies purchases, it is €100 more than expected.

To make sure your bank account and VAT return are correct, you enter an Other Receipt to reverse this. You use the same date, amount, le and VAT rate.

  • Your bank account balance increases by €120 and is now correct.
  • Your next VAT return is adjusted by €20.
  • Your office supplies are now €100 less and are correct.

Which transaction to use

  • Reverse an other payment with a refund.
  • Reverse an other receipt with a refund.
  • Reverse a supplier payment with a supplier refund.
  • Reverse a customer receipt with a customer refund.
  • Reverse a refund with a payment on account.
  • Reverse a bank transfer with the another opposite bank transfer.

Reverse an other payment

To make the necessary adjustments

  • Create refund to reverse the receipt. This creates an opposite transaction.

  • Re-enter the transaction with the correct details, if required.

Once saved the refund shows on your next VAT return, reversing the original receipt.

  1. From Banking, choose the relevant bank account.
  2. Select New, then Sale / Receipt.
  3. Choose Other Receipt tab, then the Enter a refund for a purchase link.
  4. Enter the details of the transaction you want to reverse.

Reverse an other receipt

To make the necessary adjustments

  • Create refund to reverse the receipt. This creates an opposite transaction.

  • Re-enter the transaction with the correct details, if required.

Once saved the refund shows on your next VAT return, reversing the original receipt.

  1. From Banking, choose the relevant bank account.
  2. Select New, then Purchase / Payment.
  3. Choose Other Payment tab, then the Enter a refund for a sale link.
  4. Enter the details of the transaction you want to reverse.

Reverse a supplier payment

  1. If the payment paying an invoice, unallocate the payment first. The payment then becomes a payment on account.
  2. Create a refund for with same details as the payment.
  3. Allocate the refund to the payment on account.

Read more about how to reverse a supplier payment

Reverse a customer receipt

Do this when you use Cash Basis scheme, and the receipt is included on a submitted VAT return.

The refund clears the value from your customer account, bank account and updates the VAT return. The sales invoice now shows as Unpaid.

  1. If the receipt is paying an invoice, unallocate the receipt first. The receipt then becomes a Payment on account.
  2. Create a refund for with same details as the receipt.
  3. Allocate the refund to the payment on account.

Read more about how to reverse a customer receipt

Reverse a refund

If you use Cash Basis scheme, and the refund is included on a VAT return, you cannot edit or delete it.

Instead enter the reverse transaction to clear the value from your customersupplier account, bank account and to update the VAT return.

Reverse a refund allocated to a credit note

As you cannot delete or unallocate the refund, you must reverse the value of both the credit note and refund. To do this create a new invoice and a new payment with the same date, bank account, amount and .

This removes the refund from you bank account balance, updates the balance on your customersupplier account and updates your VAT return.

  1. Create a new invoice with the same date, and amount as the credit note. This reverses the credit note.

    1. From Purchases, choose Purchase Invoices , then New Purchase Invoice.

    2. Enter the details identical to the original credit note, and Save.

  2. Pay the invoice. This reverses the refund.

    1. Once the invoice is saved, Choose Record Payment. Make sure you select the same bank account.

  3. Enter a new credit note and refund with the correct details.

Once saved

  • The new paymentreceipt shows on you bank account, cancelling out the value of the refund. We recommend that you reconcile the new paymentreceipt straight away, to make sure you balances are correct before your next bank reconciliation.

  • The invoice and the new paymentreceipt show on the customersupplier account, cancelling out the value of the refund and credit note.

  • The new paymentreceipt is reported on your next VAT return, cancelling out the previous refund.

  • Enter a new credit note adn refund with the correct details.

Reverse a refund allocated to a payment on account

As you cannot delete or unallocate the refund, you must reverse the value of the refund. To do this, create a new paymentreceipt with the same date, bank account and amount. This updates the balance of the bank account, the balance of the customersupplier account and the VAT return.

  1. From Banking, open the correct bank account.
  2. Select New Entry, then Purchase / Payment Sales/ Receipt.
  3. Select the Supplier Payment Customer Receipt tab. Enter the customersupplier, bank account, payment method, date, amount and VAT rate. This must be the same details as the original refund.

  4. Choose Save and select Yes to save as a payment on account.

Once saved

  • The new paymentreceipt shows on the bank account, cancelling out the value of the refund. We recommend that you reconcile the new paymentreceipt straight away, to make sure you balances are correct before your next bank reconciliation.

  • The new paymentreceipt is reported on your next VAT return, cancelling out the previous refund.

Reverse a bank transfer

Here you simply enter the transfer in reverse. This cancels out the original transfer. You'll still see both transfers in your bank reconciliation and Activity list.

  1. Go to Banking, then select New, and Bank Transfer.

  2. Enter details of the transfer. You must enter

    • Paid from Bank Account - the bank money was originally transferred to

    • Paid into Bank Account - the bank the money was originally transferred from

    • Date Transferred

    • Amount Transferred

  3. Click Save.

 

Related content

Unallocate transactions

Customer refunds

Supplier refunds