Reply to: Elan Self Billing & Invoices

[malvolio]

Of course you can be on the CA scheme. Where have I said you cant be? However, the tax point issue is determined by the agent raising the self billing invoice in agreement with HMRC.

No, absolutely not.

The point of CA is that the VAT is due when the cash (hint... ) hits your bank account. The VAT point on the invoice under CA rules merely defines the prevailing rate at which VAT will be charged, NOT the point at which it is to be accounted for or paid.

[minstrel]

Of course you can be on the CA scheme. Where have I said you cant be? However, the tax point issue is determined by the agent raising the self billing invoice in agreement with HMRC.

Your agent should have sent you confirmation of this agreement with HMRC when it told you not to raise invoices.

Sorry, I still don't get it. I'm not trying to be argumentative, I just want to try and understand.

I understood the thrust of your argument to be that you might get into trouble with HMRC for paying VAT in a later period in the event of an investigation. I was thinking if you were on the CA scheme, the date the invoice is paid is the only one that matters?

Nope because the agency has a self billing VAT arrangement with HMRC. That takes precedent.

When you say the self billing arrangement "takes precedent" what is taking precedent? The point at which the VAT payment is due or the tax point?

WRONG! By raising an invoice and sending it to the agent, you're creating a tax point of when the VAT is due.

Is it that there is a difference between the "tax point" and "when the VAT is due" which is different on the CA scheme to the normal VAT scheme?

When on the CA scheme, I don't see how raising an invoice can create the point at which VAT is due as I thought the whole point of the CA scheme is that the VAT only becomes due when payment is made rather than when the invoice is raised.

[BolshieBastard]

So does that mean my company is not allowed to be on the cash accounting scheme if my agency operates a self billing VAT arrangement?

Do you have a link confirming that?

Of course you can be on the CA scheme. Where have I said you cant be? However, the tax point issue is determined by the agent raising the self billing invoice in agreement with HMRC.

Your agent should have sent you confirmation of this agreement with HMRC when it told you not to raise invoices.

[shoes]

Quite. Raise an invoice yourself, don't send it to them if that is going to confuse them. You raise an invoice, the invoiced amount is what appears in your company account, job done. If they feel like pr4tting about pretending to raise invoices for YOUR company (!) that's a matter for their internal accounting procedures and has little to do with you.

[malvolio]

Assuming you have your own company and not an umbrella...

Firstly you can't raise an invoice for another company, it's illegal. what they are giving you is a payment advice note.

Disregarding that, if you're happy to be paid against an advice note then fine. Otherwise, raise your own invoice purely for your own records: it your company, it's up to you to maintain audit trails. It's not like it's a major effort, after all.

Thirdly what they do with the VAT is not your problem. You have to account for yours, they won't be paying it for you. This can go wrong with expenses, BTW, depending on whether or not they accept the principle of VAT on VAT for charges (which they should but it all works out straight either way so no point in sweating it).

Fourthly, this whole self-billing thing was never meant for what we do, it was designed and support manufacturing processes, espcially EDI/Just-In-Time deals, where speed is needed and actual physical (and accountable) delivery acts as the trigger

Finally the legislation is framed around physical supply of components, so much of the accounting detail doesn't actually translate to supply of services.

HTH

[pmeswani]

So does that mean my company is not allowed to be on the cash accounting scheme if my agency operates a self billing VAT arrangement?

Do you have a link confirming that?

In my particular case, I had an intermediary agency involved... which I admit I neglected to mention earlier. My invoice went to the first agency, don't know what the process was between my agency and Elan.

[minstrel]

Nope because the agency has a self billing VAT arrangement with HMRC. That takes precedent.

So does that mean my company is not allowed to be on the cash accounting scheme if my agency operates a self billing VAT arrangement?

Do you have a link confirming that?

[BolshieBastard]

What about if you are on cash accounting VAT scheme?

Surely then you can raise whatever invoices you like, but if you are never paid for the 'duplicate' invoice no VAT is due and the tax man can't have a problem with it.

Nope because the agency has a self billing VAT arrangement with HMRC. That takes precedent.

[minstrel]

WRONG! By raising an invoice and sending it to the agent, you're creating a tax point of when the VAT is due.

What about if you are on cash accounting VAT scheme?

Surely then you can raise whatever invoices you like, but if you are never paid for the 'duplicate' invoice no VAT is due and the tax man can't have a problem with it.

[BolshieBastard]

What the agency does with the invoice is up to them. I generate it for completion and for an audit trail. Even though you are right.... I'm still happy doing it for the sake of completion.

WRONG! By raising an invoice and sending it to the agent, you're creating a tax point of when the VAT is due.

[pmeswani]

You can't.

The invoice that the agency pay is the invoice that they themselves raise for you (that's why it's self-billing, they bill themselves for you).

If you present to HMRC an invoice that is not the invoice paid by the agency then you are lying to HMRC, and it is better not to do that.

What the agency does with the invoice is up to them. I generate it for completion and for an audit trail. Even though you are right.... I'm still happy doing it for the sake of completion.

[Fred Bloggs]

OK <pedant>it's not an invoice, it's an aide-memoire for entering into your accounting system</pedant>

Yes, I've always done this but the aide memoir looks like an invoice that I'd use if I wasn't self billing. It helps me to keep the books straight.

[expat]

I generate my own Invoice but that is purely to get the remittance into my Company Accounting software.

It wont hurt.

Alan

OK <pedant>it's not an invoice, it's an aide-memoire for entering into your accounting system</pedant>

[AlanR]

I generate my own Invoice but that is purely to get the remittance into my Company Accounting software.

It wont hurt.

Alan

[expat]

Personally, I would do both the Timesheet and the Invoice, primarily for peace of mind.

You can't.

The invoice that the agency pay is the invoice that they themselves raise for you (that's why it's self-billing, they bill themselves for you).

If you present to HMRC an invoice that is not the invoice paid by the agency then you are lying to HMRC, and it is better not to do that.