Credit note format and essential fields

A clear credit note connects an invoice reduction to the original sale. Give the note its own number, identify the invoice being adjusted and show the net, tax and total credit separately.

By My Inventory Items · Practical document guide

Identify both parties and both documents

Record supplier and customer names, addresses and relevant tax registration details. Include a unique credit note number, issue date, and the original invoice number and date. Keep the original invoice alongside the adjustment.

Explain what changed

State whether the credit relates to returned goods, an agreed allowance, a price correction or cancelled services. Itemize the affected products or work, quantities or hours, rates, discounts and tax amounts. Use the same currency as the adjusted invoice.

Separate the credit from its settlement

Show the total credit prominently. Record whether it reduces an unpaid balance, creates a customer credit or supports a refund. Keep payment references in the settlement record so a refund and a future invoice allocation cannot consume the same credit.

Worked example

A service adjustment of 24 hours × £95 gives £2,280 net. An illustrative 20% VAT adjustment is £456, giving £2,736 total credit. This matches the teal preview; use the actual tax treatment of the original supply.

Illustrative arithmetic, not a customer case study.

Frequently asked questions

Should a credit note reuse the invoice number?

Give the credit note its own unique reference and include the original invoice number as a separate linked reference. This keeps the sale and its adjustment traceable.

Official sources and scope

The previews use UK-style GBP and VAT details. The UK guide draws on HMRC guidance; other guides explain document workflows and illustrative arithmetic. Source links checked on 17 October 2026.

Credit note guides

Credit notes for returned goods and damaged stock

Document returned quantities, calculate an invoice credit and reconcile returned goods with sellable, damaged and quarantined stock.

Credit note vs debit note vs refund

Compare seller-issued credit notes, debit notes and refunds, with examples of invoice increases, reductions and money returned.

UK VAT credit note: references and adjustment checklist

Understand UK VAT credit note references, genuine adjustments and supporting records, with links to HMRC guidance and a GBP example.

Partial credit note example and remaining balance

Calculate a partial invoice credit after a payment, avoid double counting refunds and reconcile the customer’s remaining balance.

Give every adjustment a clear record.

Enter your own details in the free credit note generator. It offers GST fields and browser print or PDF output in its own layout. Review the tax fields for your transaction.

Create a credit note

Invoice and billing guides Payment receipts Debit note templates and guides