Incorrect VAT amount invoiced

Johnhowell

All,

I have received an invoice from a company for £90 + VAT but it states:

Sub Total = £90.00
VAT @ 15% = £14.00
Total = £104.00

However, 15% of 90 = 13.50

What can I do? Are they allowed to do this? My understanding is that if they charge me the incorrect £14, this has to be given to HMRC, that is they can not pocket the extra 50p

Can I amend the values on the invoice and send a cheque for the correct amount £103.50?

Thanks,
John

anniecave

If they have made a mistake on the invoice (which it looks like they have) - then ask them to send you a new correct one!

What they pay over to HMRC is their business, but you need to get a correct invoice for your purposes!

startech

Is the difference because of rounding perhaps?

Premier_2

Johnhowell wrote: »

All,

I have received an invoice from a company for £90 + VAT but it states:

Sub Total = £90.00
VAT @ 15% = £14.00
Total = £104.00

However, 15% of 90 = 13.50

What can I do? Are they allowed to do this? My understanding is that if they charge me the incorrect £14, this has to be given to HMRC, that is they can not pocket the extra 50p

Can I amend the values on the invoice and send a cheque for the correct amount £103.50?

Thanks,
John

I'm not sure if you are VAT registered, but if you are not there are a couple of options:

1. Pay the full amount and the supplier will hand over £14 to HMRC.

Or, with the suppliers agreement:

2. Return the incorrect invoice and await for a correct one
3. Get the supplier to issue you with a credit note

or if you are VAT registered and the supplier agrees:
(at least I think you need to be VAT registered to do this)

4. Issue the supplier with a debit note.


Full information here (section 3 onwards)
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000077&propertyType=document#P54_4075

greyteam1959

Why does everybody always make things so complicated on these boards.
As anniecave says ring them up point out the error and ask them to re issue the invoice.
Job done
Simple

Premier_2

mervyn11 wrote: »

Why does everybody always make things so complicated on these boards.
As anniecave says ring them up point out the error and ask them to re issue the invoice.
Job done
Simple

Because the supplier is unable to simply re-issue a VAT invoice (unless they have the original one returned to show the VAT man it was never correctly issued)

Otherwise, if a supplier were to issue a new VAT invoice, the supplier would need to pay the VAT man the amounts of VAT specified on both invoices.

greyteam1959

Thats what I mean.........making things more complicated than they are.

Premier_2

mervyn11 wrote: »

Thats what I mean.........making things more complicated than they are.

I'm simply informing people of the rules as they stand (and explaining why) rather than allowing people to be misled by others supplying incorrect advice.

If you want simple, follow option 1 and pay the amount invoiced.

lesley1960

Premier wrote: »

Because the supplier is unable to simply re-issue a VAT invoice (unless they have the original one returned to show the VAT man it was never correctly issued)

Otherwise, if a supplier were to issue a new VAT invoice, the supplier would need to pay the VAT man the amounts of VAT specified on both invoices.

The supplier would raise a credit for the first invoice ,there is no need to have the original returned .

TighterThanTwoCoatsOfPain

Premier wrote: »

I'm simply informing people of the rules as they stand (and explaining why) rather than allowing people to be misled by others supplying incorrect advice.

If you want simple, follow option 1 and pay the amount invoiced.

Or couldnt the supplier just issue a credit note for the orginal invoice and re-issue correctly.

I work for a massive PLC and this happens all the while. (dont have much to do with that dept so not 100% on the process!) If its not incorrect VAT then they're incorrectly addressed!

Quentin

Johnhowell wrote: »

Can I amend the values on the invoice and send a cheque for the correct amount £103.50?

You can, and it's by far the easiest + quickest solution! It's the supplier's problem, leave him to work out how he sorts it in his books (if he is bothered!)