This is a freeview 'At a glance' guide to VAT on prompt payment discounts. 

The amount of VAT payable can be affected by discounts, including prompt payment discounts, unconditional discounts and contingent discounts.

Prompt payment discounts

Post 1 April 2015

Pre 1 April 2015

Unconditional discounts

Contingent discounts

Contingent discounts override

Debit notes

Useful guides on this topic

Discounts, Reward Schemes & Vouchers: VAT
Loyalty and reward schemes come in various shapes and sizes and the VAT implications may vary depending on the type of scheme offered. In this guide we cover some common schemes.

What constitutes a valid VAT invoice?
What needs to be included on a VAT invoice? Can you claim back VAT without an invoice? What evidence do you need to claim input VAT? A valid VAT invoice is required to reclaim input VAT. HMRC have discretion to allow defective invoices. 

Correcting VAT errors
What are the VAT error correction time limits? Can you correct errors through the VAT return? Do you have to notify HMRC?

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