I am helping out a friend with their accounts. Their company was just registered for VAT and this has been applied retrospectively from 1/12/2013. It is my understanding that all processing will have to be re-processed to reflect this. I would like to know how on earth do I reverse supplier invoices that have already been paid so that I may account for the VAT?
Would it be acceptable if I merely credit the relevant expense by the vat amount and debit vat control?
Thank you to all in advance.