In certain circumstances, for example, if you hadn’t actually sent the invoice to your customer, or if you simply wanted to allocate the invoice to a different project but had filed it on a VAT return, then you may choose to edit the invoice instead of going down the credit note option.
How edited transactions will be dealt with for VAT
If you edit a transaction in a locked period, FreeAgent will preserve your existing locked VAT return, and make any necessary changes on your next unlocked VAT return.
That's how HMRC expect VAT errors to be corrected.
How to add a transaction that doesn’t affect VAT.
If you have filed VAT returns and you need to add bank transactions, bills or expenses, but you don’t want FreeAgent to automatically make changes on your next unlocked VAT return, you can select 'Out of Scope' for the VAT rate.
FreeAgent is registered with the Financial Conduct Authority under the Payment Services Regulations 2017 (register no. 799763) for the provision of account information services.
Registered in sunny Scotland No. SC316774 - One Edinburgh Quay, 133 Fountainbridge, Edinburgh, Scotland, UK EH3 9QG