Flat rate invoices and credit notes
What is a flat rate invoice?
Flat rate (unregistered) farmers supplying agricultural produce or services, to an accountable dealer must issue an invoice if:
- the purchaser requests it
- the purchaser provides the form for the invoice and enters the appropriate particulars on it
- the purchaser gives the flat rate farmer a copy of the invoice.
A flat rate farmer may choose to issue the invoice even if any of these conditions are not fulfilled.
Details on a flat rate farmer’s invoice
An invoice issued by a flat rate farmer in respect of agricultural produce or an agricultural service is required to be acknowledged by that farmer. The invoice must include the following particulars:
- The date of issue of the invoice
- The full name and address of the flat rate farmer who supplied the goods or services to which the invoice relates
- The full name, address and registration number of the person who received the goods or services
- The person’s Value-Added Tax (VAT) identification number in another Member State. This applies in the case of a supply of these goods or services to that person registered for VAT in their Member State
- The quantity and nature of the goods supplied or the extent and nature of the services rendered
- The date on which the goods or services were supplied
- The price, exclusive of the flat rate addition, for the supply
- The rate and amount of the flat rate addition appropriate to the price shown on the invoice.
Price changes after invoice has issued
If the price increased after the issue of an invoice:
- a flat rate farmer must issue a further invoice
- the invoice should contain the additional amount and is subject to the same conditions as applied to the preparation of the original invoice.
If there is a reduction in price after the issue of an invoice:
- the farmer must issue a farmer credit note
- the purchaser must make a corresponding adjustment in the amount of flat-rate credit claimed as a deduction.
Flat rate farmer credit note requirements
In certain circumstances flat rate farmers are obliged to issue a farmer credit note. However, the flat rate farmer may fail to do so within the relevant time limit. In such cases, the farmer is liable for the amount of the flat rate addition that should have been stated on the note.
A flat rate farmer is liable if they issue a farmer credit note stating a lesser sum of flat rate addition than is appropriate to the reduction in consideration or discount. In such cases, the farmer issuing the credit note is therefore liable for the amount of the deficiency of the flat rate addition.
In both cases the flat rate farmer is treated as an accountable person for the purposes of payment of the amount due. The farmer is also liable to penalties.
Issuing a settlement voucher
A VAT registered person may prepare a settlement voucher when making a purchase from an unregistered farmer.
Where that settlement voucher:
- is issued prior to the issue of a flat rate invoice
- contains all the information required to be included on a flat rate invoice
- is accepted by both parties to the transaction.
It is deemed to be a VAT invoice in respect of that transaction.