Credit Note Generator
Enter the invoice you are crediting, say why, list what is being credited and download a credit note with the VAT taken back.
Worked examples
One item returned
Invoice £720 including VAT, 1 of 4 items at £150 plus VAT credited
Credit £180.00
Net £150.00 plus VAT of £30.00. The customer then owes £540.00.
A full credit
Invoice for £600 plus VAT credited in full
Credit £720.00
Net £600.00 and VAT £120.00 are both reversed.
A goodwill credit
Part of one line, 0.5 x £80 at 20% VAT
Credit £48.00
£40.00 plus £8.00 VAT.
About Credit Note Generator
A credit note is the proper way to cancel or reduce an invoice you have already sent. You do not alter or delete the invoice. Instead you issue a second document that refers to it, shows what is being credited and why, and takes back the VAT that was charged. Both you and the customer then have a clear record, and if you are VAT registered, the credit note is part of your VAT records.
This generator makes a credit note with its own number and date, the original invoice number and date, the reason for the credit and what happens to it: it reduces what the customer owes, it will be refunded, or it can be used against a future invoice. List only the lines or quantities you are crediting, at the same prices and VAT rates as the original invoice. The tool shows the net, VAT and total credit, worked out in whole pence, and the PDF prints them as credits. A partial credit works exactly like a full one.
How to use Credit Note Generator
- Enter your details and the customer, and tick VAT if you are registered.
- Enter the credit note number and date, and the number and date of the invoice you are crediting.
- Choose a reason and what will happen to the credit.
- List what you are crediting with the original prices and VAT, then create and download the PDF.
Common uses
- Crediting goods that were returned
- Correcting a mistake on an invoice
- Giving a discount after the invoice was sent
- Cancelling an invoice for work that was not done
Frequently asked questions
Why not just change the invoice?
An invoice that has been sent is part of your records and may already be in the customer's accounts and VAT return. A credit note corrects it without rewriting history.
Does a credit note affect VAT?
Yes. It reduces the output VAT you owe, by the VAT on the amount credited. Use the same VAT rate as on the original invoice for each line.
Can I credit only part of an invoice?
Yes. List only the items or quantities being credited. For half of a line, enter a quantity of 0.5 or reduce the quantity.
Should credit notes have their own numbers?
Yes. Use a separate running sequence, such as CN-001, with no gaps, and always refer to the invoice number.
Does a credit note mean a refund?
Not by itself. It can reduce what is owed, be refunded, or be kept against future invoices. The tool prints which one you choose.