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Correcting VAT errors - Money Manager MTD filed

How do we correct last year's errors ?

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My client has been using Money Manager to file VAT returns under MTD.  When preparing the accounts I usually send details of the errors made in the year and the client adjusts the totals on the next return.  This year the client is unable to adjust the figures - usually they deduct the overclaimed vat from the totals but this year the computer says no.  The support line is constantly engaged.  The help pages state that amendments to a filed return can only be made through the HMRC website.  The figures are low - well below £10,000. Any ideas ?

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RLI
By lionofludesch
10th Oct 2019 16:04

Form VAT652 may still be the line of least resistance.

It's not just for errors over £10,000.

I'm going to have the same problem myself soon. I've got a client who switched to Xero, there are about £500 of errors to correct from his pre-Xero days, which Xero would have picked up if he'd been using Xero at the time of the error. I've currently no idea how I should be correcting this. I'm guessing a journal.

Or - I might submit form VAT 652, rather than spend time calling the Xero helpline.

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Replying to lionofludesch:
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By CMP Accountant
10th Oct 2019 16:54

You could post a bill/invoice in the latest quarter to include the VAT amount owed to/from HMRC, and set nominal to suspense. This will include the VAT amount on the return.

Then post a credit note against the invoice/bill for the same gross value, but VAT set as No VAT.

Then post a journal between suspense and VAT to clear the suspense & reverse the double counted VAT.

I'm assuming accruals scheme - if cash basis then you would need to pay off the invoice/bill via a dummy bank account rather than use a credit note, and then transfer the same out against suspense/VAT.

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Replying to lionofludesch:
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By Cat N
10th Oct 2019 17:08

Xero allows you to post adjustments to the return before submitting it, there is a column for adjustments next to the figures on the VAT-return.

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Replying to Cat N:
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By CMP Accountant
10th Oct 2019 17:23

Very good point.

This is something Xero introduced on the new MTD style returns, so it is not available on the old style VAT return.

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Replying to Cat N:
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By johnhemming
10th Oct 2019 18:01

That is an interesting point. If it does not keep a history of the reasoning for the adjustments I am not sure it is Digital Records and Digital Links compliant.

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By Matrix
10th Oct 2019 20:02

You will need to do an entry to force the entry onto the VAT return.

I have done this in Xero before but I don’t see why another system wouldn’t accept it.

For example if you found 120 purchases had been booked gross instead of net:
Dr Cost of sales 100 (set VAT rate to 20%)
Dr VAT 20 (automated)
Cr Cost of sales 120 (set VAT rate to nil)

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By SXGuy
11th Oct 2019 09:03

I use Quickfile and MTD submissions still allow you to add adjustment to any box. Infact I had to do this yesterday for a client who sent some late invoices and had to declare the VAT in the next submission.

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By Rick Deckard
11th Oct 2019 10:28

Don't use the VAT652 form if it's a refund.

There are currently massive (currenly 9 weeks for us, and I was told my client was lucky) delays in them being processed, far better to adjust in whatever software you have.

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By carnmores
11th Oct 2019 14:06

this is a very basic bookkeeping question and should be treated as such rather than a software problem. see answer above from CMP , what xero has to do with it is basically irrelevant. Also why put in an adjustment before submitting why not just alter the incorrect entries?

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Replying to carnmores:
RLI
By lionofludesch
11th Oct 2019 14:20

carnmores wrote:
Also why put in an adjustment before submitting why not just alter the incorrect entries?

Because the incorrect entries occurred at a time when a different software was being used. There's nothing on Xero to amend.

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Replying to lionofludesch:
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By carnmores
11th Oct 2019 14:54

Then simply put in a journal entry in Xero to correct in following period

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Replying to carnmores:
RLI
By lionofludesch
11th Oct 2019 15:03

Which is what I said yesterday.

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Replying to lionofludesch:
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By carnmores
11th Oct 2019 15:55

You may have the last word Lion just this once :-)

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Replying to carnmores:
RLI
By lionofludesch
11th Oct 2019 16:01

There's always a work-around.

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Replying to lionofludesch:
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By carnmores
12th Oct 2019 10:06

its amazing how a seemingly innocuous thread can cause so much trouble. i have read the whole lot again and cant see where the supposed change from MM to Xero is mentioned.

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Replying to carnmores:
RLI
By lionofludesch
12th Oct 2019 10:21

10th October, 16.04.

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Replying to lionofludesch:
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By carnmores
12th Oct 2019 13:14

Yes from you but not the OP, its not necessarily relevant to them

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Replying to carnmores:
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By Matrix
12th Oct 2019 13:26

The OP said “any ideas” so everyone replied with what worked on the software they use even though they don’t use MM.

Nick, you moan when posters are not nice, here everyone is trying to be helpful even though they don’t know the software.

Some responses to threads these days could be nicer but I don’t think this is one of them.

Sorry Lion you didn’t get the last word (yet).

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Replying to Matrix:
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By carnmores
12th Oct 2019 13:50

Lol Matrix i think i was fair and polite and answered the question asked

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melanie lord
By Melanie Lord
11th Oct 2019 19:37

I don't know this package but can't they journal the adjustment?

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melanie lord
By Melanie Lord
11th Oct 2019 19:37

I don't know this package but can't they journal the adjustment?

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