VAT on Prompt Payment Discount

Forum Categories › VAT ADMINISTRATION ISSUES › VAT on Prompt Payment Discount

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  • 24 July 2018 at 15:11 #55442
    Roberts
    Member

    Had some work done on the house and the invoice offers a 2.5% discount if paid within 7 days. This figure is calculated from the pre-vat amount. But I am still expected to pay the full vat amount calculated as if there were no discount applied. This doesn’t seem right to me.

    Found some HMRC guidance for businesses which seems to suggest that the customer (me) has to recover the overpaid VAT through their VAT account. Well, I am not registered for VAT so that can’t apply.

    Any ideas?

    11 September 2018 at 19:36 #55826
    vatconsultant
    Member

    You are going to pay VAT for the discounted price.

    The supplier should issue a credit note to you for the discount and reduction in VAT or reissue the invoice.

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