- This topic has 1 reply, 2 voices, and was last updated 5 years ago by Tax Tutor.
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- December 1, 2018 at 11:17 pm #486727
Value added tax (VAT)
Zhi has forecast that he will have to pay VAT of £20,200 on 7 February 2018 to HM
Revenue and Customs (HMRC) in respect of the VAT quarter ended 31 December 2017.
On 12 December 2017, Zhi dispatched goods relating to an exceptionally large credit sale
of standard rated goods of £45,600 (inclusive of VAT). He has not yet issued a sales invoice
for this sale.
Because the customer is unlikely to pay until 28 February 2018, Zhi is considering not
issuing a sales invoice until 1 February 2018.(c) Explain whether Zhi can reduce the amount of VAT payable on 7 February 2018 by
not issuing a sales invoice for the credit sale of £45,600 until 1 February 2018, and,
if so, by how much the payment will be reduced.My question is if the invoice had been issued within 14 days of basic tax point, by how much could have we been able to reduce the VAT payable??
December 3, 2018 at 10:40 am #486912Whether the invoice was or was not issued within 14 days the tax point would still fall within December 2017 as if issued it would simply move the tax point from 12 December to at latest 26 December and therefore no reduction would be made in the VAT payable figure.
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