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Readers' forum : Sales slump

24 October 2017
Issue: 4621 / Categories: Forum & Feedback

How to obtain a VAT refund after deregistration.

I have a client who deregistered from VAT on 30 April 2017 because his expected taxable sales in the next 12 months were only £70 000 which is less than the deregistration threshold of £83 000.

He included output tax of £2 000 on his final VAT return after making a standard-rated sale of £10 000 plus VAT for supplying and installing a new kitchen for a wealthy property owner. However as a result of problems with the quality of the job my client has agreed to refund half of the fee to the customer amounting to £5 000 plus VAT.

My question relates to VAT: my client cannot raise a credit note to the customer because he no longer has a VAT number so should he backdate the credit note to 
30 April which would be his final day in the VAT...

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