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Credit Note in compliance with UK VAT legislation

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


334 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.

60 Comments

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Seriously, this hasn't been done yet??? What's so complicated?

I guess I'll just have to faff around and get my accountant to issue the credit note I need from SAGE.
I agree with this feature and i also suggest WHMCS team to review the billing system in order to fully meet the European legal billing law.
When the latest release you have put Validation in place so the way we use to deal with credit notes cant be done.

Validation Error

Amount In cannot be less than zero.

The fee being entered must be less than the amount in value.

You need to put a patch to rectify this or allow admins to turn off that validation and also work on a credit note feature.
Also in Austria, Germany and so on...
Also in Italy is necessary to do a credit note when a refunded has been done.
I don't see that it's my place to advise you on this matter. I know enough to know that your system is not compliant but not enough to advise you on exactly what you need to do. You must have an accountant who can give you the necessary advice.

Incidentally, you ask me to contact the support team and asked to be connected to the development team. Why can't you contact me or at least give me an email address. Why should I have to run around the houses to help you to correct your software?
Renaming of the invoice to credit note is indeed straightforward and could be achieved with a simple template edit. The complexity is definitely in the other things you refer to. We would like to try and understand more about exactly what changes are required for this. Could you get in touch with our support team referencing this thread and asked to be put in contact with the development team so we can ask some further questions. Thanks!
basically its pretty easy, you dont even name it creit invoice even it doesnt hurt.
you just duplicate the current invoice and reverse each amount - therefore all numbers get reverse.
then add one more line with a reference to the orginal invoice and ideally let us add a description there too.
thats it. it can be threated as a regular invoice - however we also need the ability to mark it as payed for the payback.
payment can be regular payment menthos or credits. so it would create a positive credit balance.

if you book it on credits and the customer later change his mind and want real money, we also need the ability to transfer from creit to real money - which is not an invoicing thing just a money transaction.

however back to credit invoice - important is that you reverse every number exactly

the second option is to use real credit invoices.
those can have positive numbers and are practically indentical to the original invoices plus reference and description.
however those CANNOT be in the same real as invoices, they are a seperate thing
because they are negative sales in your bookkeeping. if you jsut change the template name
you yould pay taxes twice where you should pay none.
a nightmare.
I agree with Mike
Nathan Hilton wrote:It is the responsibility of the payment provider to do this, not a billing system, WHMCS doesn't process any payments. Plus the invoice where you have added funds, the invoice will tell you that the invoice has been refunded along with the transaction ID of the payment gateway along with the total credited.
Invoices are sent out from WHMCS bearing the users name and VAT number therefore Credit Notes should bear the same information.

Payment processors deal with the gross figure, they do not charge VAT separately.

We deal exclusively with businesses and they need paper invoices and paper credit notes for audit purposes.
It is the responsibility of the payment provider to do this, not a billing system, WHMCS doesn't process any payments. Plus the invoice where you have added funds, the invoice will tell you that the invoice has been refunded along with the transaction ID of the payment gateway along with the total credited.