I have a client who needs to issue a credit note to a customer as the VAT was incorrect (they deal with other countries and this particular company is no longer trading in UK so the VAT on their invoices needs amending). Providing they have their Company Preferences set so VAT is amendable, can they just do a Credit Note for the customer posted to 4XXX nominal code, leaving Net amount at 0 and VAT code as standard. Is there another way to do this? Can we post a credit to VAT Liability nominal code with Net as credit amount and a different Tax Code - Does this work, (especially if their preferences aren't set as VAT amendable) or is the former the best way?
The answer to your question is a matter of preference.
If it was me I would reverse the wrong invoice, I.e. issue credit note for the whole amount, and then raise a correct invoice.
First of all, I think it will be easier for your customer. Instead of confusing them with a credit note that adjusts VAT only.
And for your own records, this will leave a better audit trail.
Hi Sammy
Full credit note and invoice as Julie suggests is a clearer way. But you can just do a vat only credit note and I'm assuming you are using sage given your description of 4xxx. So yes as far as I'm aware key your credit note as normal 0.00 net, t1, over key vat box with the correct amount. Suggest take a backup, try it and see where it lands but I'm pretty sure that will sort it.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
