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VAT on payments in advance - invoice required?

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Hi, I recently started a marketing firm and have registered for VAT.

I have a couple of clients who will be billed for projects once they are completed, which is likely to take about 6 months, however (for my cash flow!) they've agreed to pay in monthly instalments starting now.

I've read online about tax points arising when you receive payment and am thoroughly confused about what to do about VAT invoicing. The clients won't actually be billed by me until the end of the project, which is when I would produce an invoice.

However, do I need to issue a VAT invoice every month they pay? The agreement we have is that, if the contract isn't completed, I will be able to bill for time incurred but otherwise it's just an invoice at the end.

Many thanks for the help.

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By johngroganjga
06th Aug 2020 16:42

The normal practice would be to issue your invoice in advance, and deal with the consequences of it not being completed, if that is what happens, by a credit note at the time.

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chips_at_mattersey
By Les Howard
06th Aug 2020 17:22

If I were paying in instalments, since my payments create tax points, I would insist on having a VAT Invoice, to claim the input tax.

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RLI
By lionofludesch
06th Aug 2020 22:26

I vote yes.

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Routemaster image
By tom123
07th Aug 2020 08:28

If I were the client, I would be expecting (demanding..) VAT invoices to go with the stage payments.

It is very nice to receive stage payments, of course, but there is the admin to go with it.

Make it easy for the client and they will come back.

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