Credit note

Before I became a sole trader & VAT registered I paid for goods ready to install, my customer understandablely wanted to recoup the VAT sooooo my supplier issued a refund so to speak & my customer bought the goods direct through my supplier, what should I do to log the monnies going in & out, I thought I could do a credit note but the company I paid are not a customer.

Thanks
Colin

If I understand your earlier situation correctly, you might have handled the goods you purchased on behalf of your customer as billable expenses. See Record billable expenses | Manager. In such a case, include VAT in the unit price. Do not apply a tax code. When you invoice for the billable expenses, you will be passing the VAT paid directly on to your customer. Of course, your customer will demand documentation. In this way, you are treating the expense as a direct pass-through. You have to be careful not to mark the billable expenses up or down, as that would—in most jurisdictions—trigger additional tax consequences.

That approach assumes such steps are legal in your jurisdiction. They may not be. You might be required to function as the final end user in the VAT chain when you are not registered.

Additionally, it is not clear from your post whether you are trying to mix transactions from before and after VAT registration. If your supplier is refunding your purchase price so your current customer can purchase items instead, that is equivalent to any other type of refund. If you recorded the purchase via purchase invoice, you should now enter a debit note, not a credit note, reducing what you owe (or previously owed) to the supplier. If you recorded the purchase via payment form, you should just enter a receipt.

This is the only option available when a business is un-registered.
A Customer can only claim VAT if they receive a “Tax Invoice”.
An un-registered business CAN’T issue a “Tax Invoice”.
It makes absolutely no difference if the purchase is posted to Billable Expenses or a P&L expense account - as VAT obligations are totally unrelated to the purchase account allocations.