My Client has set up an online legal advice platform, the model is based on paying upfront for a number of legal hours that the customer can use as and when and is sold as generally being cheaper and available as and when needed.
Currently Vat is charged on the initial deposit that's the point of sale for buying legal hour credits, the legal hours are then available to the client as and when they wish to use them. Over time this balance of hours is then depleted, as and when this happens the system generates a quote for how many hours this will use. There is a no refund policy in place so any hours not used are lost.
They have a customer who contends that the Tax point is the timing of the quote when the service is taking place, our argument is that is not the point of sale as it is when the provision of hours has been made available to them.
I'm keen to see if anyone has come across anything similar or if there are specific rules that deal with this as i am struggling to find anything concrete.
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Actual tax point is date of receipt of money.
From 1 March 2019, forfeited money is still taxable.
If tax point for vat then as stated by Les, if tax point for revenue recognition within the accounts that is another matter.