I recently registered for VAT, effective from 1 June 2008, but my business has been running since 1 November 2007. I need to issue a credit note to a customer in respect of services supplied in March 2008. Do I have to include VAT on that credit note?
The VAT credit note relates to services you supplied before your business became VAT registered, so you do not add VAT on to the credit note amount. The rule is: the rate of VAT to be used in a credit note is the rate in force at the time of the tax point of the original supply. The tax point for services will normally be the date of the invoice, or it could be earlier if the customer agrees the service has been completely delivered at an earlier date.