Ed W wrote:
John Bell wrote:
The VAT rules aren't too bad once you get used to them.
From the UK VAT guide
"14.2.3 Deposits
Most deposits serve primarily as advance payments and will create
tax points under 14.2.2(a) when you receive them."
The general rule is that a tax point (the time at which you need to
account for the tax) is created a) when you issue a VAT Invoice or b)
When you receive payment - whichever happens first.
i.e. you have to account for VAT at the time when the prepayment is
received. This also requires the issue of a VAT Invoice. A credit memo
would not do this.
I had always read that to mean that when you finally raise the invoice
the tax point needs to be the tax point as defined by a bunch of rules
which boil down to the sooner of a) money received and b) invoice
raised. I had not read it that the invoice NEEDS to be raised at the
point you receive the prepayment though?
Ed W
Yeah, check provision 5 on your link.
"The documents specified in paragraphs (1), (2), (3) and (4) above shall
be provided within 30 days of the time when the supply is treated as
taking place"
I think this is designed to give some leeway on rearranging the order of
events to meet reality. I guess what they are trying to avoid is people
artificially *delaying* the invoice date. They have a whole bunch of
provisions which are designed to bring the invoice date forward in time,
and I guess this one is designed to avoid then springing these invoices
on people years later.
I have a VAT inspection taking place right now, I will ask the
inspectors for an opinion when they are finished
Cheers
Ed W
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