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usernestor-ale
Level 2

Some of my customers withhold VAT when paying my invoices. What should I do with the open balance left on my invoices after receiving such payments? Credit Note is ok?

As VAT is already added to the TAX calculation regardless if customers are withholding or not, a credit note will actually duplicate my VAT? Please Help. Thanks
Solved
Best answer February 04, 2021

Accepted Solutions
DivinaMercy_N
QuickBooks Team

Some of my customers withhold VAT when paying my invoices. What should I do with the open balance left on my invoices after receiving such payments? Credit Note is ok?

Thank you for getting back here, @usernestor-ale.

 

If you create a credit note with VAT, it will reduce the VAT in your VAT return. This will also show as a negative value. To create a credit note, please refer to the steps outlined by my colleague, @Mark_R

 

Also, QBO has a report that allows you to view those transactions that are included in each box on the VAT return. For the detailed steps, please see the VAT Detail Report page at this link. 

 

Let me know if you need further assistance in recording tax withheld by your customer in QuickBooks. I'm always here to help. Have a good one. 

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3 REPLIES 3
Mark_R
QuickBooks Team

Some of my customers withhold VAT when paying my invoices. What should I do with the open balance left on my invoices after receiving such payments? Credit Note is ok?

Glad to have you here in the Community, @usernestor-ale.

 

You're on the right in creating a credit note to record the open balance left on the invoice. This way, it'll reduce the VAT recorded on the invoice. Here's how to enter a credit note:

 

  1. In your QuickBooks Online, click the + New button and select Credit note.
  2. Choose the customer from the drop-down.
  3. Fill out the necessary information.
  4. Enter the amount of the open balance.
  5. Click Save and close.

 

As always, feel free to visit our QuickBooks Community help website if you need tips and related articles in the future.

 

Keep in touch if you need any more assistance with this, or there's something else I can do for you. I've got your back. 

usernestor-ale
Level 2

Some of my customers withhold VAT when paying my invoices. What should I do with the open balance left on my invoices after receiving such payments? Credit Note is ok?

OK thanks

So, that means I don't have to worry about the credit note will duplicate my VAT return?

As the VAT is added to VAT return computation at the time of invoice creation, I was thinking that creating a credit note will actually duplicate the VAT being paid (VAT return + credit note on the same value)

 

 

DivinaMercy_N
QuickBooks Team

Some of my customers withhold VAT when paying my invoices. What should I do with the open balance left on my invoices after receiving such payments? Credit Note is ok?

Thank you for getting back here, @usernestor-ale.

 

If you create a credit note with VAT, it will reduce the VAT in your VAT return. This will also show as a negative value. To create a credit note, please refer to the steps outlined by my colleague, @Mark_R

 

Also, QBO has a report that allows you to view those transactions that are included in each box on the VAT return. For the detailed steps, please see the VAT Detail Report page at this link. 

 

Let me know if you need further assistance in recording tax withheld by your customer in QuickBooks. I'm always here to help. Have a good one. 

View solution in original post