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Credit Note in compliance with UK VAT legislation

Edith Karnitsch shared this idea 3 years ago
Planned

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.

Comments (32)

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Note this isn't only UK VAT legislation, this is a European rule. For a UK company (as far as I know WHMCS is still a UK Limited) I would expect to at least follow local laws...

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WHMCS, any chance of an update on this?

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currently there is no reversed invoice in whmcs.

however a reversed invoice would be fine IF theres a reference to the original invoice and a reason.

however there needs also to be an transaction which is impossible in whmcs currently because negative transactions are not allowed (for no reason at all)

the correct way would be in case of a payment already odne to an invoice:

original invoice #100 - 500€ total.

transaction - payed by paypal 500. 1.1.2018

creditnote/reverse invoice #101 as described negative amoutns are totally fine amount: -500

transactions:

2.1.2018 payed to refundaccount / credits (in some legislations this has to be paypal)

notice that refund does not take place on the first invoice. the first invoice is with issuing and the transaction complete.

it cant be undone. refunding would be a new agreement covered with the creditnote. the payment for this is also only related to the new agreement.

also be aware it touches then credits which are a problem in itself.

as of 1.1.2019 every EU country has to handle credits without VAT and is not to be taxed until its used.

they have to be hold kinda like a bank or trust. (keeping those funds on behalf of the customer)

so best would be if credits are used just as any other payment method as a transaction. then we could use creditnote payments directly to credits - credit to paypal and vice versa and so on.