Output VAT Tax point

[joeb_444]

Hello all,

I'm treasurer of a small club which has just VAT registered. My question is regarding output vat and the correct 'tax point' on invoices.

Each month invoices will be issued to members which cover a number of transactions in the month. The transactions concern the provision of goods which according to the HMRC website guidance have a tax point at the date of delivery. Can output VAT be accounted for as a whole taking the invoice date as the tax point or do I need to split it for each transaction?

Any advice would be much appreciated.

Thanks

[spidersong]

Theoretically you can only treat an invoice as the taxpoint if issued within 14 days of the supply of goods and assuming payment isn't made in advance of the supply taking place or the invoice being issued.

THis would mean that if you had a supply on the 2nd, 12th, 18th and 25th of the month and invoiced on the 31st then you should account for the VAT for the 2nd and 12th individually and the others are covered by the invoice date.

Having said this, if you're invoicing in the month only for supplies in that month everything is going to be delcared on a single return, and so will all be declared at the proper time anyway and HMRC won't therefore care that you should've entered the first 2 supplies separately.

Obviously they may have an issue if you invoice on the first of the following month as you'd be delaying payment of due VAT from one month to the next which would affect period ends.

You can however write to HMRC and request an extension to the 14 day rule, and if it's a reasonable request i.e you can show that a) this is the practice you've always adopted with no thought of tax advantage, b) that it's onerous for you to invoice with each supply then they shouldn't have a problem extending the 14 day limit.

You of course could just adopt cash accounting for your VAT, whereby you only account for VAT once you've been paid and only recover it once you've paid your suppliers, this would possibly be the simplest solution depending on how good you are at payiong suppliers!