Year end Invoicing

[aj1977]

One of my mate does not invoice the client/agency during the months of feb and march and does it together at the end of april after the new financial year has kicked in.

He says there are obvious tax advantages in that(CT??)....i can't see how though or am i missing something here?

[Ardesco]

I don't see anything obvious myself unless he will manage to break even by differing the money across to the next financial year. IMHO he's only putting it off because next year he'll be in exactly the same situation.

If we were talking about funds drawn from the compnay I could understand doing that to ensure that you don't break into the higher tax band.

(I may of course be missing something obvious...)

[r0bly0ns]

Corp tax goes up to 21% after this year end, so you'd be 1% worse of straight away

[ASB]

I'd be really interested to figure out the "obvious" tax advantages. The only obvious one (at the risk of jail time for false accounting) is that it deferes a little tax for a year.

[philip@wellwoodhoyle]

The date of invoices is irrelevant. The business is taxed on the value of work done in a period, not the amount of work invoiced, nor the amount of money received. If they aren't invoicing until after the year end, they should instead be bringing in either accrued income if the work is completed, or work in progress if the work is not completed.