Any VAT Export gurus in the P&P today?
Any VAT Export gurus in the P&P today?
Author
Discussion

Stamp

Original Poster:

3,609 posts

266 months

Saturday 18th October 2008
quotequote all
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?

jas xjr

11,309 posts

269 months

Saturday 18th October 2008
quotequote all
might be better off in the business forum?

domster

8,431 posts

300 months

Saturday 18th October 2008
quotequote all
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

Stamp

Original Poster:

3,609 posts

266 months

Saturday 18th October 2008
quotequote all
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.

Eric Mc

125,717 posts

295 months

Tuesday 21st October 2008
quotequote all
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.

Edited by Eric Mc on Tuesday 21st October 08:51