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I read this on the BPP book for FA1 and it says that, “Where sales tax applies, this is calculated after all discounts have been applied, regardless of whether the settlement discount has been taken or not”.
My question is that why is that so? I mean why is the sales calculated after discount deduction and why does it not matter if the settlement discount has been taken or not. Shouldn’t it be calculated on the day the payment is made and when we are sure if the payment is made or not..?
Reference:
https://puu.sh/bSKBH/980649bdeb.jpg
See the NOTE.please see these rules on uk tax laws:
https://www.hmrc.gov.uk/vat/managing/charging/discounts-etc.htm
its the law to deduct tax assuming a discount has been taken
hope this helps
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