Readers’ forum: Was credit note issued correctly for VAT purposes?

I act for a builder who did some work on the private residence of an elderly person charging £80 000 plus VAT in 2022; he received full payment in advance because the job included a lot of materials and my client did not have sufficient cash flow to buy the materials before receiving payment.

The job did not progress as expected and his customer was disappointed with the quality of the work and materials so my client agreed to make a refund of £20 000 plus VAT and issued a credit note. However his customer subsequently died before he could pay the refund and there has been no contact since then from the estate of the deceased person or any other relative etc.

My client’s view is that he did everything properly and would still repay £24 000 to the estate of his customer if asked...