Readers’ forum: What is the VAT position on reissued invoices?

I am hoping readers can help me with a query I had last week from a law firm client of ours. The law firm does quite a bit of employment law and has a situation whereby it represented an individual who it invoiced monthly and who settled the invoices monthly.

In the event some 12 months on the matter has completed in favour of the individual and the result is that their previous employer must pay the settlement as well as the individual’s legal fees.

Before making this payment the employer has asked our client to credit note the employee’s previous invoices and to reissue those to them. This is a request which it tells me often arises however it is unsure if it is correct to do this. I can understand the employer’s incentive to do this since it would effectively reduce...