I'm looking for practical solution to a problem. A client receives payments from customers sometimes in foreign currency, with small underpayments of say 1%. Sometimes due to customer bank charges passed on to client. Client writes these off as an adjustment but can the VAT be reclaimed as an adjustment without issuing a credit note or waiting for the 6 months bad debt relief?
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If we are talking EC customers then bank charges have to be shared, I can't remember the directive but I will try to find it later. So I don't think you would be able to reclaim VAT on a short payment due to bank charges.