Probably a simple VAT question...

The usual 'When to start charging VAT' upon registration, but with a slight twist.

Didn't find your answer?

Hi All,

I'm sure this is an easy one, but please allow some wiggle room for a newbie. 

I know that the time to start grossing-up for VAT is from the effective date of registration, not waiting for the VAT number, and to show the VAT separately only after a VAT number is issued.

What about if the supplies are entertainment services, where tickets are bought in advance?  Normally (i.e. long after registration) in such a case, VAT would be accounted for upon receipt of the money as the 'actual tax point', irrespective of when the service is delivered.  However, if, for example, the effective VAT registration date is 1st November, and tickets are sold (and cash received) in October, for events taking place in, say, December, must VAT be accounted for on those sales?

As all the trader's sales are tickets - i.e. cash in advancce - I've used the timing of the cash received for the historic turnover test, in determining when registration is compulsory.  Applying similar logic to the example above, I expect that no VAT would be due on the cash received before registration, even though the event takes place after registration.  Would that be right? 

Your input would be very much appreciated! 

Thanks in advance...

Replies (2)

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chips_at_mattersey
By Les Howard
19th Sep 2017 08:31

The tax point logic is correct. If the tax point is before your EDR, then you do not account for output tax.
The same for purchases, although you are entitled to claim input tax on certain pre-registration costs; Notice 700, chapter 11 explains these.

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Replying to leshoward:
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By Philosophic1
19th Sep 2017 19:04

Hi Les,

Thanks very much for taking the time to respond - much appreciated. Being relatively new to Practice (although 18 years in Accounting) it's reassuring and great to have someone with your experience confirm my thinking.

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