VAT on old payment

PGM
PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
in General accounting discussion
We have an old payment (to us) sitting on account from when vat was 17.5%, we've just decided the amount is due to us. Should it be processed at 17.5% or 20% vat?

Thank you

Comments

  • Rozzi Rainbow
    Rozzi Rainbow Registered Posts: 465 Dedicated contributor 🦉
    Just looking on the HMRC website at the info they published when the rate changed:

    http://www.hmrc.gov.uk/vat/forms-rates/rates/rate-increase.htm

    Was it goods or services you sold? Quote from the above link:
    "Retailers
    If you are a retailer you must use the 20 per cent rate for all takings that you receive on or after 4 January 2011. But if your customer pays on or after 4 January 2011 for something they took away (or you delivered) before 4 January 2011, your sale took place before 4 January 2011 and you should use the 17.5 per cent rate." Looks like you could use 17.5%.

    Also "Services you started before 4 January 2011 but finished afterwards
    If you started work on a job before 4 January 2011 but finish afterwards you may account for the work done up to 3 January 2011 at 17.5 per cent and the remainder at 20 per cent. If you choose to do this you will have to be able to demonstrate that the apportionment is fair." Also looks like you can use 17.5%.

    Not sure if they might think it's now too late to still use 17.5%, but it's not them losing out by you only just deciding to invoice now.
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
    Rozzi Rainbow wrote: »

    Not sure if they might think it's now too late to still use 17.5%, but it's not them losing out by you only just deciding to invoice now.

    Thanks Rozzi, I think we'll go with the 17.5%.

    We are invoicing now, but we've had the money for a few years... So i'm sure we've already broke a bunch of rules...

    I'll process it and hope its not picked up! :)

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