VAT on invoices with free credits in Help

edited February 2016 in Help
Is there anyone else in the UK or EU that has had an invoice with free credits applied?

I have an invoice where the service charge is $8.00. I then have $4.03 of free credit applied, giving a taxable amount of $3.97. Then VAT is applied at a rate of 20% on $3.97 = $0.79. So Far so good.

However, now the VAT is added to the original $8.00, giving an invoice total of $8.79!

Surely the tax should be added to the taxable amount giving a total of $3.97+$0.79 = $4.76?


  • OK so after further discussion with support, it appears the problem stems from the way the credit is seperately applied.
    I'm not sure the UK taxman will accept the invoice as supplied, however I'll leave it to my accountant to explain ...
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