Refund VAT only on an invoice

[justbreve]

Hi - I raised an invoice with VAT and the client paid. However I have discovered now I shouldn’t have charged VAT. I want to refund the VAT amount to him.

Invoice is reconciled as paid but not yet closed as part of the VAT return.

How can I fix this in the system, normally I would raise a credit note and re-issue the invoice, but not sure on this one.

[QFMathew]

Hi @justbreve

You can tweak the credit note for this. I’ll give you a quick example.

I have an invoice for £50 + 20% VAT (£60 in total):

I’ve since discovered that I shouldn’t have charged the VAT, so I have two options:

1. Change the invoice to be zero rate and record the whole figure as the invoice total (so £60 at 0% VAT)
2. Refund the VAT amount with a credit note.

If I go with option 1, I can simply amend the invoice, change the VAT rate and increase the amount charged:

If I do this, I should re-issue the invoice to the client as they may try and claim the VAT back from the previously issued invoice.

The other option, option 2, would be to refund just the VAT. If you go to More Options >> Credit Note, I’m presented with a screen where I can amend the values for the credit note. Here, I can tweak it to be for the VAT only, like so:

Note that the total of the credit note is equal to the value of the VAT.

This would show up on your VAT return as being charged, and then being refunded:

Hope that helps!

[justbreve]

@QFMathew thanks that worked!