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How to report a vatable credit for an invoice that hasn't be created

#1

Hi,

I have just signed up as my new VAT quarter started on May 1st.
I have an invoice from a supplier that was raised in the last quarter (which I have reclaimed VAT for).
They have just sent me a credit note to cancel this invoice (which means that I need to pay the VAT reclaimed back at the end of this quarter).

What do I need to do to add this entry in these accounts? I don’t want to knock out the current bank balance - as it is bang on.

#2

Hi @dipens

Was the original invoice paid at all? Has any money changed hands between you and your supplier (either for the original invoice, or for the credit)?

#3

Yes, the original invoice was paid (in the last VAT period - and hence VAT has been reclaimed).
I am guessing maybe a simpler solution would be to mark this credit down as a payment instead - as that way I just pay back the VAT in my next return?

In terms of the credit, we have received the money back so need to account for it.

#4

If you have received the credit balance into your bank account then it may be easier to tag this refund to the supplier account and attach the credit note this way.

As it won’t have been included on your previous return, regardless of the date (if it is in this quarter or before) then it will be pulled into your next return.

hope this helps

#5

Hi,

Thanks for this.

Note sure if I am doing the correct thing when tagging it as a refund to the supplier account as I get the following message:

No qualifying purchases could be found to refund against. Make sure the corresponding purchase has been logged before you attempt to process this refund.

#6

Sorry - you have to do it backwards, so add the credit note to the supplier and then you’ll be able to do the bank posting from there

#7

Hi,

Have you got a post on how I can add a credit note to the supplier?

#8

this guide should help: Managing credit notes

Essentially you just add a negative invoice. When you put in the minus it automatically changes to a credit note :slight_smile:

#9

Thank you - did the trick

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