A new client with annual sales of about £50,000 and not registered for vat continues to argue that they have not changed customers vat on their invoices. They use shopify to sell their products to UK consumers only. The evidence, the sales invoices have vat on them and the csv reports also show vat paid.
The system doesn't appear to be very user friendly and easy to understand and although I've tried to find out additional information about the software, it's a bit limited. There is some guidance that in the default settings, if the button is not unchecked then the selling price includes vat before any discount is given to consumers.
The client thought the price charged, the selling price excluded vat and this was the intented payment for the product. The reality is that the sales are 4k less than they intended as they didn't uncheck the box and the sales figures on the invoices are inclusive of vat.
How would you approach this? Is it possible to write to consumers explaining that they were charged vat on the sales invoices by mistake but the price would have been the same as the client wanted to charge this price exclusive of vat. There are hundreds of small amounts of vat over a ten month period.
or do they have to repay all the vat back to customers because it was their error or inform HMRC about the vat collection.
The client currently has a slow down in activity and wouldn't be able to repay this amount quickly.