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VAT question

(5 Posts)
moogalicious Sat 01-Mar-14 11:40:53

quick VAT question! When I'm reclaiming VAT, is it correct that I claim according to the invoice date not the payment date? For example, at the end of my quarter I have bills which are dated, say 31 March, but are not paid until the end of April, which is in the next quarter. If I pay in advance of the invoice, I'm assuming I reclaim according to the payment date.

If this is correct, how do I reconcile these as BACS payments - are these payments classed as outstanding the same as they would be if they were cheque payments?


Hoppinggreen Sat 01-Mar-14 17:39:55

Not sure about reconciliation as my accountant does all mine but I do know that the relevant date for VAT submission is the one on the invoice not the payment date.

moogalicious Sat 01-Mar-14 19:43:10

That's great. That means I can reclaim more than I thought this quarter.

riksti Tue 04-Mar-14 12:11:04

It depends - if you're doing VAT on 'cash basis' then you need to follow the payment/receipt dates for both purchase and sale invoices. If you're on 'invoice basis' then you follow the invoice date. You can't mix and match but have to choose one approach over the other. Usual rule of thumb is that if you pay your suppliers quicker than your customers pay you then cash basis is better. But if your customers are paying before you have to pay out for supplies then invoice basis is better.

The above is slightly simplified but hopefully gives you the idea of how to think about this VAT issue.

TalkinPeace Tue 04-Mar-14 21:25:41

are you on cash accounting or invoice accounting :

do you account for VAT on your turnover when you raise the invoice or when you get paid?

that determines when you can reclaim on purchases as they have to be on the same basis

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