Client Query - Tax Has Been Incorrectly Applied to a Sales Order

Client Query - Tax Has Been Incorrectly Applied to a Sales Order

Problem/Question

A sale that is tax exempt has had VAT applied. How can I change this from happening to this customer again?

Solution

Once the sales invoice has been issued you can no longer change it. You will need to perform a return, as stated below.
  1. Open the sales order affected.
  2. Green select everything on the sales order, click Actions followed by Create Customer Return Note.
  3. In the return note screen green select all the items, enter a return reason and choose Direct Exchange from the Actions button.
    1. Ensure the options of credit original delivery are set appropriately and then click Save.
  4. Go in to the customer record and switch off the Customer Pays Tax option.
  5. Go back to the return note and enter Edit mode.
  6. Click Actions and then click (remember to click Actions first):
    1. Process Return.
    2. Issue credit note.
    3. Allocate credit note to exchange.
    4. Go to Exchange Note.
  7. The exchange note is treated exactly the same as a sales order - just make sure the tax is correct on the order before processing it.
    1. You can switch off tax if it has been added it via the Additional tab. Process as normal but remember there is no shipping required - you've already sent this order.
  8. Go to the customer record
  9. Select the Statement tab.
  10. Click Actions and choose Refund Payment or Credit - fill in the details as required to refund the tax paid.
  11. Click Continue.
All done.

Going forwards this customer should never experience this again as you will have switched off the Customer Pays Tax option - this is a setting that would normally be enabled as the system will handle the tax automatically depending on the setup.