Content
U-Turns Galore
Premises, Promises
Filing Bonus
RIP: 0% Rate
His and Hers
Party Spirit
State Of The Union
VAT's The Point?
Going Dutch
Away Win For Revenue
WIP-Round
The Best Land Plans
Tax Free Gizmos
Where Theres A Will
Do You Work Here?
Out Of The Shadows
Sacrifice Works
Home Sweet Office
Sauce For The Goose
Blissful Ignorance
PC Or Not PC?
Lost On Penalties
Worth The Paper
Carry The Can
|
It's important to get the "tax point" right for VAT - if you don't put a sale through the books at the right time, you could pay VAT to Customs too early, or they could fine you for paying it too late. The trouble is that the law tells you when you have to account for a sale, and this may not be when you would choose to. The basic rule is that you have to account for a sale when you deliver goods to your customer. You can delay if you issue a VAT invoice for the sale within 14 days after this, but you have to book the sale earlier for VAT if you receive a payment in advance of the delivery date. There are special rules for "sale or return" supplies. If you aren't sure at the time of delivery whether a sale will actually take place, you don't have to treat it as a sale until you are certain - when the customer accepts the goods - or twelve months after delivery. The Scottish Court of Session recently considered whether a "cooling off" period which the law requires for internet sales turned a normal sale into one that was covered by this rule. The taxpayer argued that the customer had the right to return the goods for any reason within seven days, so until the end of that week it wasn't certain that there would be a sale. The judges disagreed. It was really an ordinary sale, and the extra statutory rights didn't change that. The sale had to be booked for VAT at the time the goods were ordered - because a payment was collected at that time. If the customer returned the goods, the sale would be reversed with a credit note in the normal way. It wouldn't make a big difference on any particular sale, but it would affect practically every sale the business made. If you want to check that you are accounting for VAT at the right time, we will be happy to discuss the rules with you. |
© Bayar Hughes & Co., 2010.