Originally posted by sweetandsour
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Reply to: The VAT switch back to 17.5%
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Previously on "The VAT switch back to 17.5%"
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Originally posted by Lumiere View PostWas it in one of the VAT change leaflets from HMRC?
http://www.hmrc.gov.uk/vat/forms-rat...ance.pdf#sec21
It seems that it is OK to raise an invoice after 1st January for services supplied before 1st January with the 15% VAT rate. Despite that, I think it is just easier to raise the invoice on 31st December.
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Originally posted by Lumiere View PostWas it in one of the VAT change leaflets from HMRC?
This method allows you to account for your VAT liability when you receive payment. It does not affect the time of supply (tax point). So if your flat rate percentage changes, you must apply the rate that was in place at the time of supply and not the rate that is in place when payment is received.
http://www.hmrc.gov.uk/vat/start/sch...lat-rate.htm#6
HTH
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Originally posted by Lumiere View PostSo the 31 dec invoice will be based on 15% VAT, and then when payment is received later on one will have to return FRS VAT based on 17.5% ? Isn't it disadvantageous for one's ltd ?
(assuming one uses the cash based turnover method)
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Originally posted by malvolio View PostWhat you can't do is mix up the different FRS repayment rates, they have to be those in force at the time. Hence a Dec 31st invoice is the simple (and auditable) solution.
(assuming one uses the cash based turnover method)
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Originally posted by malvolio View PostAs usual I'm way ahead of you all...
http://www.lpwcs.com/wordpress/2009/...ats-the-point/
The VAT rate is one that applies at the VAT point which is effectively the time of the sale/delivery. For a continuing provision of services, it can (and should) be the invoice date, or any other date you decide to declare as the VAT Point on the invoice.
What you can't do is mix up the different FRS repayment rates, they have to be those in force at the time. Hence a Dec 31st invoice is the simple (and auditable) solution.
The 15% or the 17.5%?
IIRC its the 17.5 one
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As usual I'm way ahead of you all...
http://www.lpwcs.com/wordpress/2009/...ats-the-point/
The VAT rate is one that applies at the VAT point which is effectively the time of the sale/delivery. For a continuing provision of services, it can (and should) be the invoice date, or any other date you decide to declare as the VAT Point on the invoice.
What you can't do is mix up the different FRS repayment rates, they have to be those in force at the time. Hence a Dec 31st invoice is the simple (and auditable) solution.
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Originally posted by jlrowe View PostYour accountant is talking nonsense, VAT is applied on the invoice date - regardless of when the work was done. Pick your invoice date and then pick your VAT rate - simple.
If you're invoicing for a period that spans the change, you probably have a bit more flexibility, but if you do work entirely within one particular period, then you should invoice according to the VAT rate at that time, not the rate at the point you invoice.
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Its also worth noting that the special VAT rules are optional and you are welcome to not apply them, meaning any invoice raised after 1 Jan for work performed in December can have the 17.5% rate applied if you wish. If the client you are invoicing is VAT-registered, it should make no difference to them whatsoever.
The reason for the special rules is for instances where you may be invoicing a non-VAT registered client in which case the change of the VAT rate would affect them.
The client/agency can not insist on you charging the 15% rate for invoices issued after 1 Jan (even if the work was performed in December) and if they do, report them to HMRC.
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Originally posted by jlrowe View PostYour accountant is talking nonsense, VAT is applied on the invoice date - regardless of when the work was done. Pick your invoice date and then pick your VAT rate - simple.
That said, the simplest thing to do would be to invoice for all work up to 31 Dec on the 31 Dec to avoid any confusion.
But, if you do not do this, if you invoice for services performed up to 31 Dec on or after 1 Jan, you *can* use the 15% rate.
See HMRC guidance for full details of the special rules for services spanning the rate change:
http://www.hmrc.gov.uk/vat/forms-rat...ance.pdf#sec30Last edited by TheCyclingProgrammer; 20 December 2009, 15:36.
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Originally posted by sweetandsour View PostWhy not create your invoice for services supplied during December on the 31st December?
I would do that.
Do you have a compelling reason for making life more difficult than it needs to be?Last edited by moorfield; 20 December 2009, 14:23.
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Your accountant is talking nonsense, VAT is applied on the invoice date - regardless of when the work was done. Pick your invoice date and then pick your VAT rate - simple.
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Why not create your invoice for services supplied during December on the 31st December?
I would do that.
Do you have a compelling reason for making life more difficult than it needs to be?
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The VAT switch back to 17.5%
I had an issue in 2008 in that the agency I was using was handling the change from 17,5% differently from what my accountants suggested I do, so I was underpaid but was later paid the rest that I was owed after throwing my toys around.
To ensure my understanding is correct, for the changeover back to 17.5%, imagine you invoice on the 5th January for work carried out in December that includes 4 weekly timesheets (so the work done is spread across the month). I`ve heard this advice so far.
1. If invoice sent in December such as on the 31st you invoice at 15% VAT. THis does not apply to me as I`ll be invoicing in Jan.
2. If invoice sent in January you can still invoice for the work done in Dec at 15%.
3. If inoice sent in January you invoice work done in December up until the 18th at 15% and work done after that in Dec at 17.5%. This is what SJD are saying
WHy can`t it ever be simple! WHich one is it? I`m going to ask accountants again but if you`re sure either way that info would be usefulLast edited by SuperZ; 20 December 2009, 14:40.Tags: None
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