Forum Message

Out of the box, credit notes aren't legal for VAT purposes

I've just been entering a credit note for a client - and I've spotted that there's no inbuilt way to marry it up with an invoice.

HMRC is quite clear on the matter:

http://www.hmrc.gov.uk/vat/managing/special-situations/returned-goods.htm#4


A valid credit or debit note must also show:
(list of things that Solar Accounts already includes in credit notes)

the number and date of the original VAT invoice


Obviously I can fill this in by hand in the Comments field - but it'd make a LOT of sense for the credit note window to force me to associate it with a particular invoice.


Posted by James Cort on Feb 22, 2013 4:40 PM GMT

Hi James,

Thanks for reporting the problem. There are really two issues here:

  1. Most users are simply unaware of this requirement, so they will not enter the invoice number and date into the comments field.

  2. It would be quicker and easier to choose the invoice number from a drop-list in the credit note window rather than manually type the information into the comments field. In implementing this we would need to consider (a) would a user ever want to create a credit note without an associated invoice? and (b) could a credit note be related to multiple invoices?

In our opinion the first issue has the highest priority.

Regards,


Posted by Mark McLaren (Solar Accounts) on Feb 25, 2013 8:46 AM GMT

Solution that I've seen used:

Each credit note contains a line item describing the original invoice item that credit is being applied to. (You're meant to include this in a credit note anyway).

The original invoice number is shown as part of the line item rather than applying to the credit note as a whole.

In this way, one credit note can apply to many invoices very easily - it's done on a per-line-item basis.

I have no idea whether or not this is good enough for the taxman, though...


Posted by James Cort on Mar 18, 2013 10:57 AM GMT

Hi,
Just to show that it's not just one person, this is something I have struggled with too. I will keep an eye on how this develops!
Jill


Posted by Jill Hyde on Apr 29, 2013 9:24 PM BST

Hi James and Jill,

Just to let you that when you open an invoice window and select More Options > Copy to Credit Note, then resulting credit note will have a reference to the original invoice in the comments field.

Cheers


Posted by Mark McLaren (Solar Accounts) on Aug 30, 2013 10:32 AM BST