Non VAT invoices

Non VAT invoices

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Hi Sirs

I am registered for VAT from the 01/09/2015. I own an accounting practice and my clients pay me monthly. I have already told them that their cost will increase by 20% from the above date. However a few of them do not want to pay me the VAT. I was reading that the tax point of an invoice is the earlier of:

Invoice date and

Payment date

So if I issue the whole year invoice as on the 31/08/2015 and they choose to pay me monthly then is that OK?

For example if someone pays me £100 a month. I can issue him a invoice £1200 as on 31/08/2015 and they can continue pay me £100 a month.

Would it cause me any problems. Will the payments treated as with or without VAT for VAT return purposes?

Please clarify.

Thanks for your help.  

Replies (4)

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By levelheaded1903
01st Aug 2015 17:42

Hi, for continuous supplies of services, paid for periodically, are charged to tax on the earlier of receipt of payment and issue of each tax invoice - unless one invoice is issued in advance for periodic payments covering a period of up to a year, when the tax point becomes the earlier of each due date or the date of actual payment. For a single supply of a service the tax point is when the service is completed or when it is paid for if earlier.

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By cheekychappy
01st Aug 2015 20:03

In addition to the above, it is not a long term solution anyway, is it? What would you do next year?

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By shahzadmalik
02nd Aug 2015 00:55

Its not a long term solution and only couple of existing clients are interested for me to issue a full year invoice. 

Is it correct to think that the invoice amount will be my sales and my debtors. The debt will be paid over one year.

I do not want VAT man to problem me on this so that is why I need to be clear as to what will happen if my above debtors pay me each month. Would it cause any problems?

Thanks for your replies above. They are informative but please add more if you like.

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By Manchester_man
02nd Aug 2015 04:14

Did you say that you own an accounting practice? Perhaps one of the accountants / tax advisors can help?

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