We have a purchase and a credit note, both issues within a VAT period. They do not show on the VAT return for the relevant period. Would you be able to assist us please?
Hi @Filan
Happy to try and assist, but just a few questions first if that’s OK -
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Are you on cash or accrual accounting for VAT?
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Was the purchase paid (either partially or in full)? If it was, was the credit note a refund of the amount paid, or was it a reduction of any outstanding balance?
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What’s the date of the invoice in question, and what’s your VAT period?
Thank you for your reply. Please see my replies below:
- Cash accounting, but both, the payment and the invoice were both within the correct VAT quarter.
- The purchase was unpaid. The credit note was the reduction of the outstanding balance.
- The VAT period was April - June. The invoice date was 1 April, the Credit note date was 31 May.
Thank you
As cash accounting only includes items at the point where the cash changes hands, it is correct that neither an unpaid purchase nor a no-refund credit note were included in the VAT return. That’s the quid pro quo of cash accounting; on the one hand you don’t have to pay over your sales VAT until your customers have paid you, but equally you can’t claim back your purchase VAT until you’ve paid your suppliers.
If/when you subsequently paid the (reduced) outstanding balance I would expect that payment to show as part of the relevant VAT return for the payment date.
I don’t think that’s right, as we have other invoices and credit notes and they do show on the VAT return.
When did you pay the outstanding balance of the original purchase, after the credit note deduction? Was that during the same April to June VAT period? That payment date is the point at which I’d expect things to start showing on the VAT return.
Could we please have someone from Quickfile team to look into this for us? Thank you.
Hello @Filan
I have sent you a private message
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