Correcting an unexplained payment in a locked VAT period

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i've got an issue with an unexplained transaction within a statement in april which is now in a locked VAT period.
The issue showed up recently when i imported statements. Essentially, there was an adjustment to the statement via the bank due to paying in slip keyed £2 less than the amount payed in with a correction on the statement of £2 to balance the account several days later by the bank.
What this meant is although account is correct, i have a £2 debit and a £2 credit showing as unexplained that i cant delete or modify. The side affect of this is that FA wont allow me to submit my current VAT return due to this.
Any ideas how to resolve it?
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Mike Karthauser

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  • frustrated

Posted 9 years ago

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Emily

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Hello Mike,

You'd need to unlock the locked VAT period - then you'll be able to explain those transactions, re-lock the locked VAT return then submit your current VAT return.

Could you try that and give me a shout if you get stuck?

Kind regards,

Emily
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lauren gregory

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But how do you “unlock” the period?
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Kirsten Zammit, Employee

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Hi Lauren,

If you have filed a VAT return with HMRC, you won't be able to unlock the VAT return.  You would edit the transactions/invoices/bills etc and any changes will be automatically entered into your next open VAT return. 

This is what HMRC would expect if you need to amend anything from a previous VAT return. 

Please feel free to email us at support@freeagent.com if you'd like us to provide you with a more detailed answer.

Kind regards, 

Kirsten
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Roman Gaufman

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How to unlock the locked VAT period? - I go into the VAT section and it says filed and it doesn't let me do much else?
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Emily

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Hi Roman,
You can only unlock a filed VAT period if you haven't filed it online with HM Revenue through FreeAgent.
You can tell if you've done this by clicking on the return. If you see a green circular "Filed" stamp and an IR mark, then you've filed it online through FreeAgent and you won't be able to unlock it.
Kind regards,
Emily
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Roman Gaufman

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Why is this? - I was led to believe by my accountant and HMRC that any expenses I forgot to explain, I can add to the next VAT return and any that I added in error I can remove as long as it all balances out and I pay the correct amount due to HMRC. HMRC provide a way to file amended VAT returns online and my accountant have done so in the past, unless I'm fundamentally misunderstanding how all this works?

My current VAT liability to HMRC is around negative £4,000 - it appears my last accountant have done a big mess of my accounts, didn't backdate my VAT and even made a mess of my corporate tax. I am now explaining all past transactions and will be filing amended corporation tax for the last 3 years and VAT returns for the past 9 months or so - the latest return was filed just as a temporary measure to avoid fines. So I really need to unlock everything and my FreeAgent to act as if nothing has been filed.
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Emily

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Hello Roman,

I would disagree with your accountant and say that HMRC expect any changes to be made on the current VAT return, rather than re-visiting and changing any historic returns.

This is why you'd need to make any changes in the current VAT quarter in FreeAgent.

HMRC do also expect you to keep a clear and sacrosanct record of all the VAT returns you've filed with them, which is why FreeAgent makes it impossible to unlock a VAT return that you've filed online, or change any transactions in a historic filed VAT return.

We are looking at how we can make it easier for our customers to post adjustments, but the VAT return these adjustments affect would always be the current VAT return, because that is how HMRC expect changes to be made. There's more information here http://www.hmrc.gov.uk/vat/managing/p...

As for correcting your historic data, I would suggest you ask your accountant - whether the same one or a new one - to advise on how best this should be done. He/she may want to recreate your historic records, but if he/she opts for that, I would suggest you open a new FreeAgent account (and if you have to do this, then we would mark your old account as free so that you're not paying twice for the same business), so that, as I explained above, your historic VAT records can be preserved.

I hope that helps but please do ask if you have any further queries.
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Roman Gaufman

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That's what I meant, if any changes need to be made, I can make them on the current return. So surely if I edit a past transaction or expense, FreeAgent should add the change to the current return? - i.e. if I explain an expense that hasn't been used yet, it should be added to the current return instead of just locking it and forcing me to add it twice? - I'm guessing a future release may just support something like this?

I guess I will have to open a new account, but how would I transfer all the data from the old account to the new account? - i.e. attachments and explained transactions, etc?
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Roman Gaufman

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Hi Emily, would just like to go ahead with this suggestion. Can you please rename my current FreeAgent account from Fusetech to Fusetech_unused and transfer all data to a new account called Fusetech?
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Emily

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Hi Roman,
Which data would you be wanting transferred, please?
Kind regards,
Emily
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Roman Gaufman

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Everything please (minus the locking),
Roman
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Emily

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Hi Roman,
To be honest I wouldn't recommend that - I would suggest you start a new account and start afresh from hereon in. If you try and re-create or re-visit historic data you'll land yourself in a muddle.
Kind regards,
Emily
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Roman Gaufman

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I want freeagent to act as nothing has been filed as I will be filing amended accounts with HMRC from company creation.
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Roman Gaufman

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Any updates?
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Emily

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Hi Roman,
Have HMRC asked that you file amended VAT returns, please? - this is not normally their preferred approach, they would usually expect the next VAT return to be amended.
Kind regards,
Emily
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Roman Gaufman

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Logged into my FreeAgent, cannot see any change - I have periods 2010-06-30 to 2011-02-07 locked, with 2 payments for VAT that do not correspond anywhere close to reality (those returns were filed by my last accountant).
Please log into my account to see the extent of the problem.
I haven't even filed my accounts for some of that period (2009-09 to 2010-10) so now everything is locked and preventing me from even finishing my corporation tax. When will this be unlocked?
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Emily

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Hello Roman,
I'm sorry but we do need to hear whether this is what HMRC would actually expect you to do, please?
I would be very surprised if they want you to file amended VAT returns for a historic period.
I'm going to open a ticket for you in our support helpdesk system so that we can carry on with this discussion off the public forum.
Kind regards,
Emily
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Roman Gaufman

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I dont understand, you said: "He/she may want to recreate your historic records, but if he/she opts for that, I would suggest you open a new FreeAgent account (and if you have to do this, then we would mark your old account as free so that you're not paying twice for the same business), so that, as I explained above, your historic VAT records can be preserved."

That's what we want to do, please open a new FreeAgent account with all the data copied across.

I can't carry on explaining transactions to file my Corporation Tax until this is done and this whole experience is extremely frustrating.
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Emily

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Hello Roman,
My apologies for the frustration you're experiencing. I think to an extent we have crossed wires which I will do my best to unravel. I will answer this in our Zendesk system.
Kind regards,
Emily