When we submitted an invoice to one of our clients, the system calculated vat on a per line basis. However our client’s system calculated vat on total value of invoice basis when making payment.
Because of way rounding worked for VAT between the two methods, we ended up being underpaid by 1p. We created a credit note for 0 pence for value and -1p for VAT to get the invoice marked as paid correctly, however when doing the VAT return, it seems that -1p VAT is not accounted for anywhere in the calculations.
Whilst value is negligible, we don’t want to fall foul of reporting errors, so were wondering how to sort this.