I felt this needs to be highlighted as a serious issue and wondered of the experiences of others and how widespread this is?
Recently filed 1st return in MTD using Xero. Just looked at a review of the current quarter and was shocked to see some filed items appearing again in Late Claims in the new Quarter.
I asked Xero help why this was the case and response was this ...
'We've taken a closer look at the period ending July 2019 VAT Return, and we can see that late claims are showing. As you have found, transactions that have been included in a previously submitted MTD VAT Return, will show as a late claim in the next open period if they have been edited or removed. If you want to make changes to the figures that appear on the MTD VAT Return, you can use the adjustments feature.'
In the pre-MTD version you could deselect 'include late claims' but this is no longer an option. Unless companies are aware that merely editing an invoice will push it into the late claims, I imagine it could have huge implications if not picked up. Just wondered whether others had experienced this? And since the whole point of MTD was to make the information accurate, this surely does the opposite though no doubt the errors will be to the benefit of HMRC.
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Whilst I dont use Xero for filing returns (we use bridging so it can be manipulated when required as the box 6 & 7 tend to be hopeless and things stray into boxes 8&9) Late claims if edited will cancel out if they cancel out.
If they don't cancel out, they will quite rightly be included in next quarter.
Not sure what your problem is? Its not like the detail goes to HMRC.
Given this has been happening since Xero first started, of more worry is you have presumably never checked the chuffing detail before. Do you just slap the send button or something?
@the OP
its hard to be derogatory when you are clearly don't know how you software works.
"late claims" is absolutely a "flag system that recognised items previously submitted through the return". Thats its entire function. One which you are undermining by making manual adjustments and deselecting it previously.
This ought to have been abundantly clear once you had reconciled the VAT even if you misunderstood how the system works. You do reconcile the VAT before filing, right?
Its very hard to have much sympathy, this is really basic stuff, unless you are a bookkeeper, in which case I suggest you stop what you are doing, you are way out of your depth. Phone your accountant, and get them to come and sort it for you.
Isn't that the point of late claims? I've never de-selected the option because to do so migght omit a transaction that was entered late or amended.
Isn't this correct behaviour? Surely if you make adjustments to previously included figures, these adjustments should appear on the next VAT return?
Or have I misunderstood what Xero is doing, is it putting the full invoice/expense on the return again?
For late claim adjustments Xero reverses the original entry and adds another, so you see 2 entries on the detail report
So as I said, it's correct that Xero should do this, though as Matrix points out, there is a tidier way of processing these changes to avoid using the late claims feature.
The result should be the same regardless, provided the original returns were properly completed.
Did you file the last return from Xero so it is showing as published?
Why are you changing invoices from a submitted VAT return, a credit note should be issued.?
Do you think Xero is doing something different from pre-MTD? I will take a look as I always assumed late claims were correct but will double check from now on.
Puzzled.
Why would an invoice issued and set in concrete be edited after the event.
Precisely what editing are you or client doing.
You might simply wish to change the account code, or the due date. I've never checked whether any edit triggers a late claim entry, nor whether find and recode does.
By the way a problem with simply locking the period in Xero to prevent such changes is that you can't then do things like allocate credit notes or overpayments without opening it again.