Definition

A VAT Adjustment Note is a record used to document changes in previously reported VAT, such as pricing errors, returned goods, or credit note issuance.

Key points

• Must include reference to the original transaction.
• Required for FTA audit trails.
• Helps align accounting records with corrected VAT values.

Practical example

A retailer overcharged VAT on an invoice and issues an adjustment note to reflect the correct 5% VAT amount.

Why it matters

Ensures that VAT reports remain accurate and traceable during future audits.