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Michael Paul Accountants

Credit notes valid for VAT purposes

16th April 2011

Paul from M P Accountants Northamptonshire  discusses ensuring credit notes issued are valid for VAT purposes.

To be valid for VAT purposes a credit note must contain all the information usually appearing on a full VAT invoice (see my earlier article) plus the following;

  • a refernce to the number and date of the original invoice
  • show both the correct and incorrect amounts of VAT
  • be headed “credit note”
  • reflect an agreed reduction on the value of the sale and be issued within one month of this agreement
  • represent a genuine entitlement of claim for the amount either to be refunded or offset against the value of future sales

Credit notes cannot be issued to cancel output tax because the customer will not pay!

A credit note does not have to include VAT although if the customer cannot recover the input tax they will want the VAT to be included.

At M P Accountants Kettering, Corby, Northampton and Market Harborough are conveniently located near to our premises in Lamport although we have clients from all over the UK.  We are a firm of Chartered Certified Accountants ensuring you receive a professional and competent service at all times.

If you need any advice regarding VAT or any other accounting or taxation matters please don’t hesitate to contact us.

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