Correcting a wrong VAT type in Accountable: A step-by-step guide
As a self-employed professional or business owner, managing your VAT status correctly is crucial for accurate tax reporting. If you are a franchisee but mistakenly selected “Subjected to VAT” in Accountable instead of the correct option, "Franchisee," you may be wondering how this error affects your financial records and VAT filings.
In this article, we’ll walk you through the steps to correct the error and ensure your VAT status is set up properly in Accountable.
⚠️ Before taking any steps, first verify your VAT type on Intervat. Follow our step-by-step guide here: How to verify your VAT type when setting up your account on Accountable |
Selecting the wrong VAT status in Accountable can lead to several issues, including:
Incorrect VAT Charging: If you mistakenly select “Subject to VAT,” you may end up charging VAT on your client invoices, even though, as a VAT franchisee, you’re exempt from VAT. This could lead to confusion and dissatisfaction, as your clients might pay and attempt to deduct VAT that shouldn’t have been charged.
Additionally, you won’t be able to submit a VAT return due to your VAT franchisee status.Missing Special VAT Return: If you need to submit a special VAT return (for example, if you make purchases from other EU countries), this requirement may not show up in your account. Accountable will not prompt you to file this special return, potentially leading to non-compliance and missed reporting obligations.
✨ Scenario 1: Your client has already paid and submitted their VAT declaration
If your client has already paid and submitted their VAT declaration, follow these steps:
Step 1: Issue credit notes for incorrect invoices❗
You need to cancel all revenue invoices created under the wrong VAT type by issuing credit notes. These credit notes should be linked to the current quarter.
Invoice revenue | Ticket revenue |
✅ If created in Accountable, generate a credit note from the invoice and link it to the current quarter | ✅ Create a credit note and link it to the current quarter |
Step 2: Change your VAT type to franchisee 🔄
Go to Intervat to double-check your VAT type.
In your Accountable account, go to Settings → Taxes.
Change your VAT type from “Subjected to VAT” to “Franchisee”.
Don’t forget to click Save.
⚠️ Once updated, new invoices will be automatically use the correct VAT type. However, any invoices created under the wrong VAT type must be adjusted manually.
Step 3: Adjust past expense invoices 🔍
Go to the Expenses tab in Accountable.
Select each invoice that was booked under the incorrect VAT type.
Open Advanced Settings, change the VAT type, and save.
Step 4: Recreate revenue invoices 📝
Create new revenue invoices with the correct VAT type (“Franchisee”).
Ensure these invoices are linked to the current quarter.
Step 5: Refund VAT to your client 💸
You will need to refund the VAT you incorrectly charged your client. This ensures compliance with VAT regulations.
Recap: ✨ Scenario 1 – your client has already paid and submitted their VAT declaration
Action | Revenue | Expenses |
Step 1: Issue Credit Notes | ❗ Cancel revenue invoices created under wrong VAT type.
Issue credit notes linked to the current quarter. | (not applicable) |
Step 2: Change VAT Type | 🔄 Change VAT type from “Subjected to VAT” to “Franchisee.” | (not applicable) |
Step 3: Adjust Expense Invoices | (not applicable) | 🔍 Go to Expenses, select each invoice booked under the wrong VAT type.
Open Advanced Settings, change the VAT type.
💾 Click Save |
Step 4: Recreate Revenue Invoices | 📝 Create new revenue invoices with the correct VAT type ("Franchisee").
Link them to the current quarter. | (not applicable) |
Step 5: Refund VAT | 💸 Refund the VAT that was wrongly charged to your client. | (not applicable) |
🕒 Scenario 2: Your client has not paid or submitted their VAT declaration yet
If your client has not yet paid or submitted their VAT quarter, the process is simpler.
Step 1: Change Your VAT type in settings 🔄
Navigate to Account > Settings > Taxes.
Change the VAT type
Don’t forget to click Save.
⚠️ Once updated, new invoices will be automatically use the correct VAT type. However, any invoices created under the wrong VAT type must be adjusted manually.
Step 2: Adjust past revenue invoices ✏️
For revenue Invoices:
Go to Revenue and select the incorrect invoice.
Click Edit.
Update your business info and VAT type.
Delete and re-enter the items with the correct VAT type and rate.
Save the invoice.
Resend the invoice to your client.
For revenue tickets:
Go to Revenue → Tickets.
Select the incorrect entry.
Open Advanced Settings, update the VAT type and rate, and save.
Resend the invoice to your client.
Step 2: Adjust past expense invoices 💼
Go to Expenses in the app.
Select each invoice booked under the wrong VAT type.
Open Advanced Settings, change the VAT type, and save.
Recap: 🕒 Scenario 2 – your client has not paid or submitted their VAT declaration yet
Action | Revenue | Expenses |
Step 1: Adjust revenue invoices | ✏️ Go to Revenue. select the incorrect invoice.
Click Edit.
Update the VAT type and business info.
Delete and re-enter the items with the correct VAT type.
💾 Click Save
Resend the invoice to your client. | (not applicable) |
For revenue tickets: | 🎫 Go to Revenue → Tickets.
Select the incorrect entry.
Open Advanced Settings, update the VAT type and rate.
💾 Click Save
Resend the invoice to your client. | (not applicable) |
Step 2: Adjust expense invoices | (not applicable) | 💼 Go to Expenses, select each invoice booked under the wrong VAT type.
Open Advanced Settings, change the VAT type.
💾 Click Save |