Vat relief -UK

Vat relief on invoice where goods will not be shipped for four months.

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A finance company asked me for a full vat invoice for a clients new machine. They paid a 30% deposit plus 30% of the Vat. The machine will not be shipped until December and they will pay the balance in January. How do I legally get relief on the 70% Vat in the mean time? I will be on the hook for this payment on the 11th November. Thanks. Kevin 

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chips_at_mattersey
By Les Howard
20th Sep 2023 14:15

This raises two questions:
- who is your customer? The finance company or the overseas client?
- the tax point for an export is subject to a special rule: www.gov.uk/guidance/vat-on-goods-exported-from-the-uk-notice-703 (Assuming it is an export, of course!)

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Replying to leshoward:
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By Kevin KashGone
20th Sep 2023 15:29

The client is my customer.

It’s not an overseas client.

The finance company is a leasing company working on behalf of the client.

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VAT
By Jason Croke
20th Sep 2023 16:30

Why has finance firm asked for 100% invoice from you, but only paying you 30% of the net and VAT now?

Tax point is date in invoice or date goods are made available to the customer.

You created a tax point when you raised the invoice, you are liable to declare that VAT to HMRC whether you are paid or not.

Can you make use of cash accounting rules such that only the already paid 30% is declared to HMRC?

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Replying to Jason Croke:
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By Kevin KashGone
20th Sep 2023 17:05

I think they wanted the full invoice as it’s an early release lease. Ie the lease company is paying the stage payments by starting the lease early, I expect the customer is also paying the lease company from this point too.

Goods are not available to the customer yet.

The Company is too big for cash accounting.

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Replying to Kevin KashGone:
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By Jason Croke
20th Sep 2023 17:49

Too late now but for next time, consider a pro forma invoice as these do not create a tax point until you are paid.

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