Distance Selling Returns & VAT

[Elderly]

A VAT registered business sells an item by mail order and issues a VAT Invoice.

Within two weeks the purchaser returns the item (unused) under the Distance Selling Regulations.
for a refund.

Assuming that the purchaser is a non-VAT registered consumer, how does the vendor deal with the VAT situation?

And/or if the purchaser is say a VAT registered sole trader (the vendor will not know this), does the purchaser raise a VAT invoice
when they return the item?

[Ean218]

Distance Selling Regs were replaced by the Consumer Rights Act.

Neither were/are applicable in B2B transactions. If the purchaser is reclaiming VAT he is very definitely acting in the course of trade so is not a consumer.

[Elderly]

I'll re-phrase the question:

Subject to the right of consumers to return goods for refund under the Consumer Contracts Regulations 2013 and the Consumer Rights Act 2015; how does the vendor deal with the output VAT already charged to the consumer, as that consumer cannot issue a VAT invoice to enable the vendor to then reclaim that VAT as an Input?

[2 sMoKiN bArReLs]

Elderly said:

I'll re-phrase the question:

Subject to the right of consumers to return goods for refund under the Consumer Contracts Regulations 2013 and the Consumer Rights Act 2015; how does the vendor deal with the output VAT already charged to the consumer, as that consumer cannot issue a VAT invoice to enable the vendor to then reclaim that VAT as an Input?

Presumably the vendor issues a credit note to contra the original invoice?

[Ean218]

2 sMoKiN bArReLs said:

Presumably the vendor issues a credit note to contra the original invoice?

Exactly, no actual need to send it to the customer either once refunded to card or whatever.

[Elderly]

2 sMoKiN bArReLs said:

Presumably the vendor issues a credit note to contra the original invoice?

Okay - it's that simple, Thanks.