VAT on Deferred Income / Deposits

When is the tax point?

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Hi all

I have a client who operates golfing events. He receives the entry fee from a customer any time up to 12 months in advance of the event. He often pays back the full fee if a customer cancels their booking. Im thereforfe unsure on whether its deferred income or a deposit.

My question is simply, can we account for the entry fee as a deposit when received and then release the entry fee via a sales invoice on the date of the event? This is to do when the VAT element is recogniosed.

HMRC have been unable to give me a straight answer!

Thanks in advance.

Replies (4)

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Routemaster image
By tom123
13th Apr 2018 10:21

Is the VAT point not the earliest of:

1) Receipt of payment
2) Supply of goods etc
3) Date of invoice?

Or am I missing something?

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chips_at_mattersey
By Les Howard
13th Apr 2018 11:13

If this is a TOMS supply, you may be able to benefit from special tax point rules, which mean the tax point can be when the customer commences the journey or occupies accommodation. (SI 1987/1106, art 4 applies.) Hopefully your accounts software can deal with this.
More generally tom123's reply applies, so the tax point is the date of receipt of the deposit.

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Replying to leshoward:
Routemaster image
By tom123
13th Apr 2018 12:12

Aha, that's what I was missing. All my work is in manufacturing, so these other niceties pass me by!

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