Invoice dates and VAT returns etc

[psychocandy]

I'm assuming date on invoice is the important thing to determine if a transaction is one month or another for VAT purposes?

For instance, work done during June could be invoiced potentially on June 30th or July 1st. If VAT quarter end was June 30th, am I right in saying that in the first example, the VAT would be due on the invoice but in the 2nd example it would be in next quarters return?

So, I guess, for cashflow reasons its best to wait until 1st of month? Is this perfectly acceptable as far as HMRC are concerned?

Also, for those of us that invoice in Euros, HMRC appear to use a standard rate for the month. Not sure how far in advance of the month in question they publish these figures but I guess it could be advantageous invoicing on the 30th of one month or 1st of next? i.e. so deemed sterling invoice on which you pay VAT is less?

For some reason, HMRC are using a low rate for the Euro for July, compared to June. (it dip a bit but has gone back up!). So in my case, because I put 1st July on my invoice, my deemed sterling invoice value is £100 or so more than it would have been if I'd invoiced on June 30th? (Not a huge amount £s on VAT paid at 13.5% though). However, advantage to me is that I get to keep the amount in my account rather than pay out in this quarters VAT.

Have I got this right?

[Sockpuppet]

You can use either.

VAT can be calculated either on the date shown on the invoice or when you get the cash. The second is known as the cash accounting method.

You can use either as long as once you've chosen one you stick with it.

[northernladuk]

Do you not have an accountant?

[psychocandy]

Do you not have an accountant?

I do, but see previous posts about the problems I'm having with them.

I have asked them the same questions but, to be honest, I'm losing a bit of confidence with them, hence the 2nd opinion.

They've just sent me a return to sign an send back to them. No mention of how its calculated etc. Options etc.

It seems to me like they're other customers must prefer it this way. i.e Accountant does it all and they just sign things. Nice fella and knows his stuff but bit too laid back for my liking.

Not the way I want to do things - if I'm signing things for my company I want to know why its done this way.

Bit anal but thats me :-) which is why I'm wondering why this accountant isnt suitable for what I want.

[psychocandy]

You can use either.

VAT can be calculated either on the date shown on the invoice or when you get the cash. The second is known as the cash accounting method.

You can use either as long as once you've chosen one you stick with it.

Wasnt aware of this. How do you indicate to HMRC that this is the method your going to be using? Or do you just informally do it this way and advise HMRC if they ever ask?

Probably easier cash accounting? Sorts cashflow problems. For instance, u could invoice 30th June (which for example is ur end of VAT quarter) but then not get it paid for 6 weeks, whereas VAT is due before this?

[craig1]

Wasnt aware of this. How do you indicate to HMRC that this is the method your going to be using? Or do you just informally do it this way and advise HMRC if they ever ask?

Probably easier cash accounting? Sorts cashflow problems. For instance, u could invoice 30th June (which for example is ur end of VAT quarter) but then not get it paid for 6 weeks, whereas VAT is due before this?

HMRC VAT Cash Accounting

[psychocandy]

HMRC VAT Cash Accounting

Cheers Craig. Need to speak to my accountant about this I think.

What system do most people use?


What about this?
HM Revenue & Customs: When transactions take place for VAT purposes

"Time of supply for goods and services

The time of supply (tax point) for VAT purposes is defined as follows:

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* For transactions where there is a VAT invoice - the time of supply is normally the date of the invoice, even if this is before or after the date the supply physically took place (as defined below).

However, see the exceptions detailed below.

Date the supply physically takes place

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For services, the date when the services are considered to be supplied for VAT purposes is the date when the service is carried out and all the work - except invoicing - is finished. "

Does this infer that services provided completely during June, even if invoiced on 1st July, are deemed to have a tax point in June? (if you dont use cash accounting system that is)

[psychocandy]

HMRC VAT Cash Accounting

I'm on flat rate VAT

" Flat Rate Scheme

You can't use the Cash Accounting Scheme with the Flat Rate Scheme. Instead, the Flat Rate Scheme contains its own cash-based turnover method."

Its cash based turnover method (i.e. similar) for flat rate :-
http://customs.hmrc.gov.uk/channelsP...345#P528_39191

[SueEllen]

psychocandy if your accountant really confuses you about VAT and the good people on here still confuse you then you can:
1. Phone up the VAT helpline and get them to explain a few things to you.
2. Arrange to go on a VAT workshop which takes about 2 hours.

[psychocandy]

psychocandy if your accountant really confuses you about VAT and the good people on here still confuse you then you can:
1. Phone up the VAT helpline and get them to explain a few things to you.
2. Arrange to go on a VAT workshop which takes about 2 hours.

Yeh. Might be a plan. Having Foreign payments certainly seems to confuse issues.