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VAT invoice paid without VAT - how to account for that

Hi,

My company is running a cash accounting scheme.

I have a business client, who used to pay my VAT invoices including VAT - no trouble here, everything worked fine.

They now paid an invoice without VAT, but the full net amount due. I know that that is possible in a B2B context, but I never had to process that in my books. So, how do I:

  • mark the invoice as fully paid up,
  • flag the invoice so that no VAT is due
  • ensure that my MTD process does not falsely report undue VAT payable?

Thanks,
Michel

Did you issue an invoice including vat? If so, why wasn’t it paid?

Yes my invoice shows my company’s VAT number, the VAT rate (20% on prof. services) and the VAT amount.

I have asked why they did not include the VAT but didn’t yet get an answer, only that this was intentional (on previous request).

Well id suggest until you get an answer as to why you hold off on tagging the payment. The answer may depend on what you do.

Thanks.

In the meantime it cleared up; they will pay the VAT int he next payment run.

Cheers,
Michel