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EXW Sales invoicing _year end

Year End Sales invoice

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We are a Manufacturing company, VAT registered and year ending 31/12. We have goods EXW availability to ship to Germany, Indonesia and the Middle East and customer pick update will be on January. Is it possible to invoice in December to increase sales and does it really affect VAT accounting?

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By paul.benny
20th Dec 2019 17:33

You can't bring forward the revenue if the goods haven't been despatched.

Para 23.10 of FRS102 states that you can only recognise the revenue when the risks and rewards of ownership have been transferred (along with various other conditions). Even if you were to invoice the goods, you have some residual risk - fire/theft etc, and the buyer cancelling the purchase.

Your sales outside the EU are zero-rated as are your German sales (assuming your customer is VAT-registered), so there is no VAT to account for. VAT reporting follows invoicing.

Be aware that one of the conditions for zero-rating is that the goods leave the UK. With an EXW sale, you must obtain evidence from the customer or the carrier of export - see VAT725.

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