Any VAT Export gurus in the P&P today?
Discussion
A quick question. We are making and then storing a table to export to Aus later next year.
If I take a 25% deposit from the customer to confirm the order, do I have to charge VAT due to the length of time holding the deposit? We will be shipping it and the balance invoice will be issued on shipping bearing in mind we will be holding the deposit for approx 4 - 6 months?
If I take a 25% deposit from the customer to confirm the order, do I have to charge VAT due to the length of time holding the deposit? We will be shipping it and the balance invoice will be issued on shipping bearing in mind we will be holding the deposit for approx 4 - 6 months?
Stamp, the invoice date is what matters to HMCE. Deposits are a legal grey area when it comes to ownership and title anyway, generally they mean jack all. When you issue the full invoice rather than the proforma is when the VAT would become due, the payment doesn't matter unless using cash accounting rules. Normally, if something was paid for in staggered or part payments (rather than a deposit) you'd go by the invoice date. A true deposit is just a bit of security for you, not a full payment.
Hope that helps a bit and an expert may know more.
ATB
D
Hope that helps a bit and an expert may know more.
ATB
D
domster said:
Stamp, the invoice date is what matters to HMCE. Deposits are a legal grey area when it comes to ownership and title anyway, generally they mean jack all. When you issue the full invoice rather than the proforma is when the VAT would become due, the payment doesn't matter unless using cash accounting rules. Normally, if something was paid for in staggered or part payments (rather than a deposit) you'd go by the invoice date. A true deposit is just a bit of security for you, not a full payment.
Hope that helps a bit and an expert may know more.
ATB
D
Thanks. That is what I thought, more or less.Hope that helps a bit and an expert may know more.
ATB
D
Not altogether true,
The Output VAT due us based on the "tax point date". Normally, this date is based on the REALIER OF the issuing of a VAT Invoice OR the receipt of cash. Therefore, cash received in advance of a sale or cash received for provision of a separate service (such as storage) prior to the sale should be accounted for in the VAT period IN WHICH THE CASH IS RECEIVED.
Obviously, if the receipt of the cash and the issuing of a sales invoice all occur in the same VAT accounting priod (usually a VAT Quarter), then this distinction is somewhat academic.
Also, if the business is on the Cah Accounting Scheme then VAT is based on the cash received amounts anyway.
The Output VAT due us based on the "tax point date". Normally, this date is based on the REALIER OF the issuing of a VAT Invoice OR the receipt of cash. Therefore, cash received in advance of a sale or cash received for provision of a separate service (such as storage) prior to the sale should be accounted for in the VAT period IN WHICH THE CASH IS RECEIVED.
Obviously, if the receipt of the cash and the issuing of a sales invoice all occur in the same VAT accounting priod (usually a VAT Quarter), then this distinction is somewhat academic.
Also, if the business is on the Cah Accounting Scheme then VAT is based on the cash received amounts anyway.
Edited by Eric Mc on Tuesday 21st October 08:51
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