Credit Note Request to suit customer

[jokerini]

Company A issues a VAT invoice to Company B (VAT unregistered) in April 2018.

Company B subsequently registers for VAT in July 2018.

Company B asks Company A to issue a credit note for the April 2018 invoice and issue a new invoice (same amount) dated July 2018 so that it can claim the input VAT.

It sounds like a dubious request and that it should be refused. Any thoughts?

 

[vandriver]

Is this the same amount PLUS vat?
i.e. do they want you to issue credit note for say €12,300 then issue an invoice for €10,000 + 2,300?
If they want you to charge them €15,139(12,300+vat) then I can't see the point.
If it's the first,then you are down money.

 

[Blackrock1]

no they just want the same invoice reissued in July rather than april (as they cant reclaim the vat on an invoice prior to registration) so no impact to the issuing entity.

as to the legality, its not correct.

 

[vandriver]

Does the company think that the invoice issued in April still contains VAT but it's ''hidden'?

 

[jokerini]

Thanks for the responses.

My gut instinct is the same as Blackrock1. It's hardy the supplier's fault if the customer did not register for VAT on time.

 

[vandriver]

Thanks for the responses.

My gut instinct is the same as Blackrock1. It's hardy the supplier's fault if the customer did not register for VAT on time.

But what are they hoping to gain?

 

[Brendan Burgess]

But what are they hoping to gain?

Back in April, they were not registered for VAT. They did not charge VAT. And they could not reclaim it.

Now they are registered for VAT and they want to reclaim it.

So they get it back.

Brendan

 

[Nutso]

If the credit note is entered in the current period, and the re-invoice is entered in the current period, they will cancel each other out, so there would be no benefit for Company B.