Prompt Payment Discount (PPD) Vat 2015

Prompt Payment Discount (PPD) Vat 2015

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On reading the HMRC brief  I would like to know whether I can just charge the full amount of vat, whilst the customer still receives the settlement discount but only on the goods value?

Goods 100.00

Vat 20.00

Invoice total 120.00 with an offer to receive 3% discount if paid within 14 days.

If customer paid within 14 days their payment would be 117.00. (100.00 - 3.00(PPD)) + Vat 20.00

Am I legally able to to do this?

Thanks,

Neil

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By Gem7321
04th Feb 2015 09:06

No

 

The whole point of the PPD 2015 is that VAT is accounted for on the amount that was actually paid. 

 

So the discount of 3% would actually be £3.60 on the whole value, with goods value being £97 and VAT being £19.40.

 

See here https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil...

 

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By Newbie_Neil
04th Feb 2015 09:35

Many thanks,
Neil

Many thanks,

Neil

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By Andrew Pearson
21st Jul 2015 17:30

edited - removed query

 

 

 

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