I am about to complete last VAT return for the previous financial year and noticed that one nominal had wrong VAT rate coded all year long.
It was marked as zero-rated when in fact should be 20% and claimable. As result, there is some money that company can claim back from HMRC.
HMRC said I don’t need to report anything in this case on 652 form- just claim it back on the next (this) VAT return (adjust box 4).
Now, as simple as it is to put numbers manually through HMRC website- I cannot actually adjust it on Xero manually because VAT amount is generated by Xero.
Also, I thought of changing VAT rate for this whole nominal and actually submitting 652- but unfortunately Xero does not adjust historical transactions.
Does it mean that I must go to all 100 historical transactions from this nominal- amend the VAT rate and then submit error adjustment forms to HMRC to merry Xero results up with HMRC database?
Thanks for the reply in advance!