The answer depends on which accounting process you are using, and if the invoice has been paid or not.
Cash Accounting method:
If an invoice is marked as ‘paid’:
- The invoice will be recognised in the VAT period when payment took place
- If you then raise a credit memo, this will be recognised in the accounting period when the credit memo was paid
If invoice is ‘unpaid’:
- The invoice will be not be recognised in the VAT period until payment takes place
- If you then raise a credit memo, this will be recognised in the accounting period when the credit memo was paid
Note: In cash accounting method, transactions will never appear on the VAT return unless they have been reviewed. See FAQ How do I review and categorise a bank transaction?
Accrual Accounting method:
If an invoice is marked as ‘paid’:
- The invoice will be recognised in the VAT period when the invoice was raised
- If you then raise a credit memo, this will be recognised in the accounting period when the credit memo was raised
If an invoice is ‘unpaid’:
- The invoice will be recognised in the VAT period when the invoice was raised
- If you then raise a credit memo, this will be recognised in the accounting period when the credit memo was raised
You can backdate a new credit memo to the date of the invoice for both documents to appear in the same accounting period.
Please note that it is the user's responsibility to ensure that all invoices and credit notes issued to customers are compliant with HMRC’s rules on the issuance of invoices and credit notes. For more information, and to familiarise yourself with the latest advice, please refer to the government’s website.
See also: Why do I see invoices and credit memos from different accounting periods in the same VAT report?