69. Invoices or credit notes – errors, etc.

Summary

This section deals with matters such as incorrect VAT on documents, VAT invoices issued by unregistered persons, the issue of flat-rate invoices by persons other than farmers and the issue of a flat-rate invoice for an excessive amount by a flat-rate farmer. In all cases, the tax so invoiced is payable to Revenue. Penalties may also arise.

Details

(1) If an accountable person issues an invoice showing tax in excess of the correct amount appropriate to the consideration, he or she becomes liable to pay the excess to Revenue. This provision is designed to discourage abuse by accountable persons who might be tempted to pass on tax credits to their customers in excess of the amounts that they are liable to pay on the consideration shown on the invoice. Similar adjustments are provided for if the accountable person issues a credit note showing an inadequate amount of tax.

Note that interest and penalties may also arise – see Part 14.

(2) If an unregistered person issues an invoice showing tax as a separate item, he or she makes himself/herself liable to pay to Revenue the tax thus shown.

Note that such persons also make themselves liable to penalties under section 115.

(3) If a person, other than a flat-rate farmer, issues a flat-rate invoice, he or she is liable for the amount of the flat-rate addition and, for the purposes of payment of the amount, is an accountable person.

(4) If a flat-rate farmer issues an invoice for a fictitious transaction or for an inflated amount of flat-rate addition for a genuine transaction, he/she is liable for the amount of the flat-rate addition or the relevant amount thereof, as the case may be, for the purposes of payment of that amount, is an accountable person.

(5) Where a flat-rate farmer is obliged to issue a credit note under section 68(2)(b) and fails to do so within the time allowed by regulations, or issues a credit note for a lesser amount of flat-rate addition than is correct, he/she is liable for the amount that should have been stated on the credit note or the amount of flat-rate addition understated, as the case may be, and is an accountable person for the purposes of payment.

Note that interest and penalties may also arise – see Part 14.

Relevant Date: Finance Act 2020