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Credit Note in compliance with UK VAT legislation

  • Edith Karnitsch shared this idea 9 years ago
  • Payments/Billing
  • 55 Comments


337 Votes
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The refund functionality in WHMCS 5.3.13 is not on accordance with UK legislation.

When a refund is issued, the system must generate a Credit Note with the following details:
  • be headed ‘credit note’ or ‘debit note’ as appropriate and show clearly all the following details:
  • the identifying number and date of issue
  • the name, address and registration number of the supplier
  • the name and address of the customer
  • the reason for its issue - for example, ‘returned goods’
  • a description which identifies the goods or services for which credit is being claimed or allowed
  • the quantity and amount for each description
  • the total amount credited, excluding VAT
  • the rate and amount of VAT credited
  • the number and date of the original VAT invoice - if you cannot do this (for example, because returned goods cannot be identified with a particular invoice), you must be able to satisfy us by other means that you accounted for VAT on the original supply

Reference: https://www.gov.uk/government/publications/vat-notice-700-the-vat-guide/vat-notice-700-the-vat-guide#credits-and-debts

The current system of issuing a revised invoice contravenes UK VAT legislation and makes WHMCS unusable for UK VAT purposes when it comes to refunds.

The main issue I can see is that currently the date of the refund is not recorded as separate entry, neither is the reason for the refund nor is a unique number applied. The renaming of the document to "Credit Note" should be straight forward.
Merged Ideas
    Issue a credit note for unpaid invoice.
    I have an unpaid invoice that i want to cancel, my accountant is telling me that i can't canceled an electronic invoice and that i need to issue a credit note with the exact amount in order to cancel an invoice.This functionality is not something that is currently offered by WHMCS.I'm sure that this is something that every one need and it's defiantly need to be offered by WHMCS.If any one know a temporary salution it will be great, thanks.

61 Comments

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ramf commented 12th October 17
Hi,
We want to use WHMCS to issue invoices - but there are several problems with the way WHMCS is working now that are not inline with the law in our case.
In general there are several types of invoices and guidelines that we should implement in order to work legally:

  1. pro forma invoice: that is actually a way to "ask" customers to pay us. This invoice should have a clear indication that this is the original invoice document and a digital signature to prove this is the original invoice. also there should be no way to change such a invoice after it was issued. when trying to send the same invoice to a customer again - this invoice should have a clear indication that this is a certified copy of the original invoice.

  2. Invoice + receipt: you issue such an invoice if the customer already paid the invoice automatically so you send him the Invoice + receipt in one document. The serial number of this invoice should be different from the pro forma invoice number.This invoice should have a clear indication that this is the original invoice document and a digital signature to prove this is the original invoice. also there should be no way to change such a invoice after it was issued. when trying to send the same invoice to a customer again - this invoice should have a clear indication that this is a certified copy of the original invoice.

  3. Refund invoice: you issue such an invoice if there is a mistake in the Invoice + receipt document or if the deal was cancelled and you have to refund the amount the customer paid you already. since there shouldn't be a way to change the original Invoice + receipt document - the only way to set things right is to issue a refund invoice. The serial number of this refund invoice should be different from the pro forma invoice number and from the Invoice + receipt document.This refund invoice should have a clear indication that this is the original refund invoice document and a digital signature to prove this is the original refund invoice. also there should be no way to change such a refund invoice after it was issued. when trying to send the same refund invoice to a customer again - this refund invoice should have a clear indication that this is a certified copy of the original refund invoice.
As you can see there are things in the list above that works differently now in WHMCS.

  • WHMCS supports all three of these types of invoicing, which apart from Proforma ones are all based around the original invoice identification and each new status / invoice will replace the original document so when a client checks via their client area they will see in the invoice presented in whichever state it's currently in, so if in a "paid" state, that is the only invoice they will see however they will be emailed a copy each time the invoice is updated - but he relevant invoices will not be present in WHMCS.

  • As mentioned above "paid" and "refunded" invoices will share the same sequential number and will be actually the same document.

  • There is no way (out of the box) to add a digital signature to each type on invoices so it will prove this is the original document.

  • There is no way to prevent us (in the admin side) to change such an invoice (all 3 types) after we issued it.

  • There is no way (out of the box) to add an indication when sending to a customer the same invoice again - that this is not the original invoice but a certified copy of the original.

There are several feature request regarding the issues above:

  • This feature request is about removing the ability to edit an invoice from the admin side after such an invoice was issued.

  • This feature request is about having a different numbering for invoice and refund invoice.

  • This feature request is about separating the 3 types of invoices to be actual 3 different documents (or maybe i'm wrong).

  • This feature request is about adding PGP Support to sign outgoing Mails - I hope this deals with invoice digital signature
    So the only things left out (if the above feature requests really do handles the relevant issues I mentioned) are:


  1. To make sure that the 3 types of invoices are 3 different documents that we (and the customer) can see at all times.

  2. Making sure that the is only one "original" invoice document - and that every time we resend an invoice it will be marked with a clear indication that this is a certified copy of the original.

So to sum it all up:
We need a way to make sure that each type on invoice is a standalone document with different sequential number and have a digital signature to make sure that this is the only original document and prevent us from changing it after issuing it and with the relevant labeling as original document or a certified copy of the original.
Thanks!
Ram
Jeff Kane commented 19th September 17
Things are worse in v7 than before, because previously we could at least manually enter negative amounts into the invoice and then use our own template to produce a credit note. But now if you enter a negative amount in the invoice, the subtotal comes out as zero!
As a B2B supplier, VAT compliance is important to us and WHMCS has never been good at it. Now it's woefully lacking in this area. Please would you look at getting this implemented. As has been pointed out above, it's not a very tricky change that's required. I would be happy to discuss with the development team if it helps.
jvkranenburg commented 14th August 17
Any update??
Arthur Jansen commented 7th August 17
This has been a while, any news?
Andi Becker commented 5th July 17
WHMCS 5.3.13 in planning 2 years ago - wow - it is against the UK legislation and WHMCS is not capable to make WHMCS compliant to common and valid law in the countries it is distributing WHMCS??? strange and for buyers of WHMCS a headache and probably even serious legal issue!
Joe Conlon commented 3rd July 17
Any update on a release date for this please?
Øyvind commented 1st February 17
Any updates on this?
Maarten commented 11th January 17
Also required in a lot of other EU countries, not only UK.
Johan van Dyk commented 7th December 16
WHMCS, when will it move from 'Planned' to the next progression status?

This is a non-negotiable compliance document and a billing system is incomplete without it.
Johan van Dyk commented 7th December 16
WHMCS, when will it move from 'Planned' to the next progression status?

This is a non-negotiable compliance document and a billing system is incomplete without it.
DaddyBear commented 31st August 16
Status changed to "Planned" - HURRAY! Thank you WHMCS Gods.
DaddyBear commented 31st August 16
Any movement on this? Last comment was 9 months ago and it's marked "Investigating" - what is being investigated? Please WHMCS, ask us questions here if you need further input and lets get this important feature on the road!
TheHosting4you commented 25th August 16
Plaese :-)
Mike Henson commented 15th June 16
Anyone from outside the WHMCS circle would believe that they were perhaps a company based in America but they're not, they in bloody Milton Keynes and the VAT processing should have been fixed at launch but even after 12 months they're still "investigating". What sort of mickey mouse operation is this?
Michael J K Findlay commented 14th June 16
We also require this for a number of our larger customers, please add this as soon as possible.