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HMRC internal manual

VAT Traders’ Records Manual

HM Revenue & Customs
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Credit and Debit notes: What is the purpose of a credit and debit note?

Credit notes amend or correct previously issued invoices; the invoices are the documents that evidence taxable supplies. The credit note is merely documentary evidence of a change to that supply, or of a decrease in the consideration for that supply.

Debit notes might be issued where there is an increase in consideration for a supply, rather than a supplementary invoice being raised. Alternatively, and only if both parties agree, a debit note can be issued by the customer rather than the supplier issuing a credit note where there is a decrease in the consideration.

In this guidance only the term ‘credit note’ has been used, although the principles outlined apply equally to debit notes and other documents having the same effect.