VAT on verbal orders

[UKSBD]

I wasn't really open between Christmas and the New year, and neither
were my suppliers.
In that time I took 3 or 4 verbal orders over the phone, but said I wouldn't
be able to do anything about them until Tuesday.
As I took the orders verbally, but won't be ordering from my supplier
until Tuesday, can I still charge 15% VAT or does it have to be 17.5%?

[3cellhosting]

In my experience the VATman will go by the date point on your invoice.

Regards

David

[UKSBD]

Yes, but can I backdate an invoice to the date I took the verbal order?
I normally invoice after products have been despatched and the VAT point
is the delivery date.
Do I still have to do that, despite the fact the order was taken (verbally)
at the old rate.

[Frankus]

You can do what you like and you'd probably get away with it. However, if it became an issue, the VATman could impound your equipment and interrogate it to discover exactly when you raised whatever paperwork you raised. It will show a 2010 datestamp on your PC records and you'd be caught.

Punishment would probably be 10 - 15 years in a forced labour camp, followed by 20 years solitary.

It's up to you...

[UKSBD]

What has the date on my pc got to do with anything?

The Paperwork from my supplier will show the date I order from them and
the date of delivery (I don't keep stock).

I'm asking if I can use a different process than I usually do? (legitamately)

[KM-Tiger]

Probably not.

This post (http://www.ukbusinessforums.co.uk/forums/showpost.php?p=1082814&postcount=5) from 3pic explains how a tax point can be created, and my reading is that you haven't got one as you have neither delivered nor received payment.

Frankus is right, you will probably get away with it, but forgot to mention that you will have to stay in Siberia after the 20 years solitary.

[UKSBD]

With VAT once you start doing things one way do you have to carry on
doing things that way?

Ie.
If you use the delivery date as the tax point you always have to use
the same system?

Thanks for the warning about Siberia, I wasn't worried about the 20 years
solitary, but now you've really given me something to think about.

[GeorgeM]

Just remember to pack some warm clothes for your trip.

It's cold in Siberia at this time of the year :D

[spidersong]

With VAT once you start doing things one way do you have to carry on
doing things that way?

Ie.
If you use the delivery date as the tax point you always have to use
the same system?

Thanks for the warning about Siberia, I wasn't worried about the 20 years
solitary, but now you've really given me something to think about.


It's your business you can use whatever system you like and can invoice at different times in different ways for every customer if you want (although that may get a little complex if you've got more than 4 or 5 customers).

However in this case the tax is always going to be at 17.5%, as previous answers have said the tax point is when you a) deliver the goods, b) recieve the payment, or c) issue an invoice, as none of these three happened in 2009 then you're looking at 17.5%.

If you're willing to go through the tribunal process to argue that a verbal invoice is worth the paper it's written on then you can try it, but I'd think that HMRC will be very much of the opinion that invoicing is a physical process, and that taking the verbal order hasn't created a verbal invoice. It's presumably the case that your phonecall didn't include all the details required for a valid VAT invoice, i.e. you didn't quote your VAT number or address to them, didn't issue a seuential number to them via the phone, or tell them what the VAT rate you were using was during it etc.

[The other thing to mention is that although you can adopt whatever systems, terms, etc. you like, if you use one procedure in 99.9% of all cases, then when they visit HMRC are going to have a very good look at the other 0.1%!]