Table of Contents


1. Reversing a paid invoice on VAT invoice accounting

When a paid invoice has been included on a submitted VAT return, however, there is a mistake with the details or the invoice has been duplicated, you can make a correction by reversing this invoice and recreating a new invoice if necessary. 


This section of the guide explains the reverse process for paid invoices if you are on an invoice accounting VAT scheme. You can check which type of scheme you are on within the Settings > Tax > Manage VAT schemes menu.


Step 1.


Head to Sales > Invoices and click on the Paid tab.



Step 2.


Click on the invoice number that needs reversing.



Step 3.


The quickest process to reverse the invoice is to either delete or deallocate the payment from the invoice, apply a credit note and then create a new invoice if necessary.


In this case, I will be deallocating the payment. Under the Payment history table at the bottom left of the menu, click on the Deallocate link and confirm once prompted. 



Step 4.


You can now reverse the invoice by applying a credit note. Beside the Payment history table click on the Credit tab. Add a date and description and then hit the Apply credit note button to complete.



Step 5.


Once the invoice has been reversed a new copy of an invoice can be created with the corrections and payments made as necessary.


Please note: Both the reverse invoice and the corrected invoice will need to be included in a future VAT return.


To apply the deallocated payment to the new invoice, click on the Allocate payment button when viewing the new invoice.



Step 6.

Select the appropriate payment and then enter the amount to allocate beside the appropriate invoice. 

Finally, hit the Allocate button to complete.



2. Reversing an unpaid invoice on VAT invoice accounting

This is the simplest scenario. You just need to apply a credit note to cancel the original invoice.


Step 1.


Navigate to Sales > Invoices and select the Unpaid tab.


Step 2.


Click on the invoice number you want to reverse.


Step 3.


Go to the Credit tab.


Add a date and a brief description (e.g., "Issued in error").


Step 4.


Click Apply credit note. The original invoice is now cancelled.


You can now create a new, correct invoice if needed.



3. Reversing a paid invoice on VAT cash accounting


When a paid invoice has been included on a submitted VAT return, however, there is a mistake with the details or the invoice has been duplicated, you can make a correction by reversing this invoice and recreating a new invoice if necessary.  

This section of the guide explains the reverse process for paid invoices if you are on a cash accounting VAT scheme. You can check which type of scheme you are on within the Settings > Tax > Manage VAT schemes menu.


Step 1.


Head to Sales > Invoices and click on the Paid tab.



Step 2.


Click on the invoice number that needs reversing.


Step 3.


To create the reversal invoice, hit the Copy button.



Step 4.


Update the unit price so that the amount is changed to a negative value and then hit the Save button at the top of the invoice form.



Step 5.


Allocate payment using the 'Record payment' form. This paid invoice will have the effect of reversing the original in your accounts.



Once the invoice has been reversed a new copy of an invoice can be created with the corrections and payments made as necessary.


Please note: Both the reverse invoice and the corrected invoice will need to be included in a future VAT return.