My client got a PO in Jan 10 for £100k - with a further deal of a couple of million - if all goes well.
He paid £15k straight out to a factory in China to start production.
Customer has since failed to pay the remaining £80k to complete production - so production halted.
Vat return now due - does my client have to pay the vat on the £20k - or is there any way he can pay vat on the £5k balance?
He has no money to pay the vat on the £20k - as this has been his only 'sale' this year - taking up all his waking hours! He is now trying to find alternative investors to complete this first stage of the project.
Or should he submit vat return showing vat on the £20k and then ask to defer payment to HMRC?