Within the Layer there is the option to delete invoices via the disable invoice deletion role in the user permissions, whilst the function is available in the Layer, Layer Systems Ltd advises that you DO NOT delete any invoices from your company’s instance of the Layer.
The function is there solely to allow your company to delete any training invoices that have been created prior to your company using the Layer in real time. Prior to your company using the Layer to invoice your customers you may find that your staff need to create a few test examples within the Layer in your companies training/test records for training purposes.
Once your company is using the Layer to invoice actual customers no invoices regardless of whether they are for testing/training purposes should be deleted.
The reason for this is because of strict HMRC guidelines that state that all invoices must have a “Unique invoice number that follows on from the last invoice” i.e. a unique sequential format.
In addition to this HMRC guidelines clearly state that you must “keep copies of all the sales invoices you issue even if you cancel them or produce one by mistake”.
This means that once your company has invoiced a customer using the Layer then any additional invoices will be created using your unique invoice reference format in a sequential order.
If anyone in your instance of the Layer then deletes an invoice then this would cause a break in the unique sequential reference format for your invoices, if during an audit HMRC were to note this break in sequence this could lead to fines and/or civil proceedings against your company. HMRC guidelines state:
HMRC also have the right to visit your business at any point to inspect your record keeping and charge you a penalty if records aren’t in order.
Additionally if there is a break in your sequential format then it could result in your invoices becoming invalid which would mean that you could not claim any VAT back from HMRC which would result in a loss to your company.
There will be instances whereby your created invoice is invalid, such as:
Invoice created for a testing or training scenario
Invoice has been created incorrectly
Customer has cancelled the order but an invoice has been created
In these instances a user should set the invoice status to cancelled. If an invoice has been billed to a customer and the balances within the Finance tab need to be amended then a credit note should be issued against that invoice in the Layer.
To read the actual guidelines set out by HMRC please follow the link below:
Legal Information:
1. Limits of Layer Systems Ltd responsibilities:
1.1 In the event that an invoice is deleted from your instance of the Layer, we will not accept legal responsibility for the following
1.2 We shall not be held responsible for any legal proceedings taken against your company by HMRC or any other parties
1.3 We shall not be held responsible for any penalties that arise from any HMRC audits
1.4 We shall not be held responsible for any direct or indirect loss to your company as a result of an invalid invoice
1.5 This knowledge base article is in no way to be construed as definite legal guidance on HMRC guidelines and rules relating to invoices, for full legal advice on Invoices please refer to HMRC