Accounting Query - Deposits

[gumshoe]

To all the knowledgeable folks on this forum:

I have an accounting (limited company) query regarding forfeited deposits on sales of goods/services.

As I understand it, a deposit that is forfeited without the goods/services ever being delivered/used means no taxable supply has been made. Therefore this should not show up on the turnover figures, but instead constitutes a capital gain?

Does this sound correct? If not what is the correct way of accounting for forfeited deposits?

Thanks!

[AndyAudi]

gumshoe said:

To all the knowledgeable folks on this forum:

I have an accounting (limited company) query regarding forfeited deposits on sales of goods/services.

As I understand it, a deposit that is forfeited without the goods/services ever being delivered/used means no taxable supply has been made. Therefore this should not show up on the turnover figures, but instead constitutes a capital gain?

Does this sound correct? If not what is the correct way of accounting for forfeited deposits?

Thanks!

I know I have certainly seen hotels bills which did not have VAT for "No Shows" when folk didn't turn up.

(Total amount remained the same so the hotel actually made more out of the Non Sale and not having to surrender the VAT)

Edited by AndyAudi on Wednesday 22 April 10:45