Re: Prepayments redux

[Ed W <..hidden..>]

John Bell wrote:
> The VAT rules aren't too bad once you get used to them.
>
>  From the UK VAT guide
> "14.2.3 Deposits
> Most deposits serve primarily as advance payments and will create
> tax points under 14.2.2(a) when you receive them."
>
> The general rule is that a tax point (the time at which you need to  
> account for the tax) is created a) when you issue a VAT Invoice or b)  
> When you receive payment - whichever happens first.
>
> i.e. you have to account for VAT at the time when the prepayment is  
> received. This also requires the issue of a VAT Invoice. A credit memo  
> would not do this.
>   

I had always read that to mean that when you finally raise the invoice 
the tax point needs to be the tax point as defined by a bunch of rules 
which boil down to the sooner of a) money received and b) invoice 
raised.  I had not read it that the invoice NEEDS to be raised at the 
point you receive the prepayment though?

Ed W