Application on Request & VAT

Diddy Mau

Hi All,
we have recently received a Application on Request (stating this is not a Tax Invoice).
my question is what is the best way to account for the VAT?

The Application states, once paid a VAT Invoice can be issued.

Also what would happen is these Applications were every month and a partial payment system was set up (each month a different amount paid).

I'm thinking of the implications to the VAT, especially if the application is issued in one financial quarter, and paid in another

Sorry if this does not make sense

MarieNoelle

In general, the VAT tax point would be the earliest of date of payment or date of the invoice, unless an invoice is issued within 14 days of payment (in which case it's the date of the invoice).
If you are on cash VAT accounting you account for it at the date of payment.
So in your case I think you ignore the date of the application on request and just look at either date of payment or date of invoice.

Diddy Mau

thanks.
Its not Cash Accounting.
So, I would have to enter full amount as Net (say Dec), VAT Return does not include the VAT Amount (Oct-Dec). Once paid (say Jan). the VAT applies then.
I would have to Journal amount in Sage. or is it best to put VAT owing to separate nominal code

MarieNoelle

Can you not enter a different tax point to the date of issue of the Request on Sage?

Diddy Mau

I'm really not sure.
I normally put in date received, as this is required for the management accounts. this is why I thought could I internally split this between nominal codes. I know what VAT will be due but will not be taken into account in the wrong quarter

Bmer82

we get this all the time with fee notes generally lawyers and accountants. we keep a separate file system only entering onto sage when the VAT invoice is received and posting payments on account to sage until this is done.

Diddy Mau

Just wanted to say thanks for all the help.
Appreciated