underpaid old invoice

[scooterscot]

A recent letter from the VAT man (actually woman) meant I head to look back at the last 4 year to check for consistency. All fine. However in checking I noticed a error in an old invoice which had meant the work was underpaid by about £3k.

How do I account for this mistake? There's obviously no hope of recovery.

[Sockpuppet]

A recent letter from the VAT man (actually woman) meant I head to look back at the last 4 year to check for consistency. All fine. However in checking I noticed a error in an old invoice which had meant the work was underpaid by about £3k.

How do I account for this mistake? There's obviously no hope of recovery.

Do you have a balance outstanding against the customer for the £3k under paid? Was your turnover for the year artificially £3k high? Did you not mention it at all. Was all the VAT paid correctly?

If so who did your year end as I'd have thought they should have spotted that!

[scooterscot]

Do you have a balance outstanding against the customer for the £3k under paid? Was your turnover for the year artificially £3k high? Did you not mention it at all. Was all the VAT paid correctly?

If so who did your year end as I'd have thought they should have spotted that!

no (because I charged them incorrectly), no and no.

The amount charged was less than it should have been by about £3k after a correction was made to compensate for the previous month's invoice. However the compensation went in the wrong direction! The VAT due was essentially nulled by that mistake but that should not have been the case. The VAT man has not picked up on it.

And your correct it should have been picked up on by my accountant at the time. That was SJD.

[tractor]

Errors

Do you have a balance outstanding against the customer for the £3k under paid? Was your turnover for the year artificially £3k high? Did you not mention it at all. Was all the VAT paid correctly?

If so who did your year end as I'd have thought they should have spotted that!

WHS

My last contract was a self billing one. I didn't notice an error until half way through the following year - it related to initially non vatable self invoices until VAT reg came through - when they paid the outstanding VAT on a separate invoice, there was still one going through payment so it didn't get picked up.

Even after 18 months, all I had to do was go through the invoices week by week with the payments dept and it was all sorted. I had accounted for the VAT even thought the agent hadn't.

Given that all businesses are required to maintain accounts and documents for varying terms, if it's less than 6 yrs and your evidence is compelling there shouldn't be a problem in rectifying the error unless there was a time restriction clause in the contract. This, in itself may be a problem where the contract may have required you to account for work/time supplied in a timely fashion and where you may be liable for any third parties losses - in effect you may 'owe' the agent the billable amount and they may be unwilling or unable to bill the client and reimburse you. In which case, be careful. Good luck with it.

[scooterscot]

The agency I billed through has since been swallowed up by a larger company.

[tractor]

Takeover

The agency I billed through has since been swallowed up by a larger company.

The swallower will acquire certain rights and obligations. It might still be pertinent to chase it.

You would need to take advice on the tax treatment both for turnover and VAT from your acct most definitely.

[Jeebo72]

no (because I charged them incorrectly), no and no.

The amount charged was less than it should have been by about £3k after a correction was made to compensate for the previous month's invoice. However the compensation went in the wrong direction! The VAT due was essentially nulled by that mistake but that should not have been the case. The VAT man has not picked up on it.

And your correct it should have been picked up on by my accountant at the time. That was SJD.

To be fair to SJD last year they noticed I'd missed off 3 invoices! Kerching.

[scooterscot]

To be fair to SJD last year they noticed I'd missed off 3 invoices! Kerching.

I know they served many well unfortunately I was one of the few in the Scotland branch that had no end of bother with them.

[scooterscot]

The swallower will acquire certain rights and obligations. It might still be pertinent to chase it.

You would need to take advice on the tax treatment both for turnover and VAT from your acct most definitely.

Will give it a go, nothing ventured nothing gained.

[Sockpuppet]

Can you write it out in these terms?


Original Invoiced: £10k
Original VAT Charged: £1.750k
Total: £11,750 (i.e. this is the amount you invoiced for not should have invoiced for!)


Amount Received: £14.5k

There are two issues here a) what you should have invoiced for. b) If you've treated what you did invoice for correctly in regards to VAT.