UK Fixed Rate VAT Scheme - VAT on Expenses
I run a relatively new business and am about to submit our first end of year accounts. We're on the UK Flat Rate VAT Scheme which means we means.
My issue is that at the start of the year I had been adding expenses and classifying the appropriate VAT on those expenses.
However, I've since discovered that because I am on the flat rate scheme, HMRC say that I should be just leaving expense purchases as zero VAT as I cannot claim that VAT back and any income earned as a result of the flat rate scheme just goes into the general pot. My issue is that I now have expenses which have been classified at 20% VAT and I've submitted VAT returns correctly but because the VAT return was cleared the system will not let me change the VAT on the expense back to zero. This is despite the VAT having no impact on the return. Is there anything that can be done, ZOHO books is freezing these transactions and I want to get it done right for my first year