I too am having this problem. According to the HMRC website VAT is charged on the discounted total that is charged to the customer.

So why is QB charging VAT on the  original amount and not on the Discounted amount. Very embarrassing when the customer has to pull you up on it. So what's happening to us:

Net Charge              39.00

10% Discount         -  3.90

Sub Tot                    35.10    VAT should be 7.02  Giving a total of 42.12

VAT                            7.80    VAT has been charged on the NET amount of 39.00

TOTAL                     42.90     VAT on the NET has been added to the S/T = 42.90

VAT Summary shows Net = 35.10 But the VAT charged as being 7.80 instead of 7.02

How can this be fixed please 

Regards

Alan