Is that right.

[GUMPY]

If the invoice is dated 01/01/11 for say the year's mooring starting on the 1st Jan, then vat at 17.5% on the whole amount is correct, as it is the invoice date that determines the rate. However, if the invoice was raised on 01/01/11 for the mooring which actually started on 01/02/11, then that comes within the scope of HMRC's fiddle spotters and they may well say that 20% has to be charged, even though the invoice is dated before the vat increase.

 

Misleading.

My mooring for the little boat runs from 1/4/11 as do all those in that marina and it was paid last week at 17.5% just as last year it was paid before 31/12/09 at 15%

all invoices were dated 1st December

 

Its all a bit late now but it is possible, within the rules to get the 17.5% rate for any mooring that is due next year.

This has been checked and verified with the VAT man and is all above board.

Edited December 31, 2010 by idleness

[nb Innisfree]

One thing's for certain, HMRC will get their pound of flesh.

[Ray]

How can they post date an invoice for a pre-dated service?

 

If you have copies of your previous invoices and can prove that they normally issue them on or before the start of the period covered, then I would presume that you can ask for a refund for the period 1 to 4 Jan because they've not mentioned it in the invoice. Me thinks that there's a fiddle going on here but other than the interest which is liable to be peanuts, I can't work out what they doing.

 

I could just run with a 4 Jan invoice on the basis that 3 Jan is a Bank Holiday.

[T.A]

How can they post date an invoice for a pre-dated service?

 

If you have copies of your previous invoices and can prove that they normally issue them on or before the start of the period covered, then I would presume that you can ask for a refund for the period 1 to 4 Jan because they've not mentioned it in the invoice. Me thinks that there's a fiddle going on here but other than the interest which is liable to be peanuts, I can't work out what they doing.

 

I could just run with a 4 Jan invoice on the basis that 3 Jan is a Bank Holiday.

 

I think if the mariana spoke to their local vat office they would get an answer of, "date the invoice from the 5th" gives them maximum return and the Marina owner feels he has complied with the HMRC. He stands to gain nothing only grief, he can't fiddle with the date on the invoice in order to gain a benefit (well not legally). It only becomes a benefit to the one who pays the vat and if he asked the question of the local vat office I suspect he would probably get a different answer?

[Ray]

One further observation. The OP doesn't indicate were or the size of the marina/mooring is.

 

We tend to automatically consider businesses as VAT registered but they need a fairly high turnover before they can register.

 

I'm not saying that the OP's "landlord" is or isn't registered, nor am I accusing them of anything. However, it wouldn't be impossible for someone to catch an unwary customer out, pretend that they're VAT registered, charge VAT, and not pass the VAT on. By doing so they can get a 2.5% rise on their income without theoretically rising their prices. The chances of being caught for a small concern with only a couple of (known) customers has to be small and probably worth the risk. I can't think of any other reason for delaying the invoice for 5 days, especially when the invoice is issued several days before the Tax Point Date. Would you worry too much to check whether someone was VAT registered if they were offering you a service priced lower than the competition? Would you rock the boat?

 

How many people bother to check a VAT invoice to see if it carries the company's VAT Registration number?

[Justme]

 

We tend to automatically consider businesses as VAT registered but they need a fairly high turnover before they can register.

 

 

 

 

Not true. Businesses can register at any size & turn over. The only rule is when you MUST register at a turn over limit.

 

 

We are VAT registered & as such received notification of how to handle invoices for work & services supplied / done after the 4th. Basically the invoice date sets the rate. Invoice before & its the lower rate invoice after & the higher one applies. They have said its up to the supplier to decide when to invoice. When its paid does not matter.

[Ray]

Fair enough but I can't understand why a business (for want of a better term) would produce an invoice before 1 January, for a rental period that commences on 1 January - the previous rental period expires on 31 December - and then set the Tax Point Date as 5 January. The business can't benefit as far as I can see, the customer loses and the tax man gains (at the expense of the customer). The business must really appreciate the customer's custom.

 

We specifically made sure that we issued all our 1 Jan invoices before the holiday so that our customers didn't get stung by the increase - we can't do anything about invoices for the months after January as much as we might like.

 

I could just see a (small) logic in dating the invoices for 4 Jan on the basis that the banks are closed from 1 to 3 Jan incl. but I fail to see the basis for what has been done. If I were the customer I'd be looking a bit further into this and possibly looking to take my custom elsewhere if that were possible

[andrewcooley]

There is a section on the HMRC website here that explains what has to be done for services that span the date of the change.

 

Unless I'm reading it wrongly, it means that VAT must be charged at 17.5% up to 3/1/11 and at 20% from 4/1/11 and tax at 20% will be required from a registered business from 4/1/11 whether or not they've invoiced it correctly.

 

Even if services or work are started before 4/1/11 and/or the invoice is dated before 4/1/11, the 20% rate applies to any part of the supply occurring after the change date.

[jelunga]

There is a section on the HMRC website here that explains what has to be done for services that span the date of the change.

 

Unless I'm reading it wrongly, it means that VAT must be charged at 17.5% up to 3/1/11 and at 20% from 4/1/11 and tax at 20% will be required from a registered business from 4/1/11 whether or not they've invoiced it correctly.

 

Even if services or work are started before 4/1/11 and/or the invoice is dated before 4/1/11, the 20% rate applies to any part of the supply occurring after the change date.

 

 

Sorry to be a pain, but please read the previous posts in this topic. It is the tax point created by the invoice date that sets the vat rate to be charged. If you are charging in advance for 12 months mooring, and that is your normal practise to invoice on the 1st of the month, then the rate of VAT valid on the date of the invoice applies for the whole of theinvoice period..

Please don't churn this one - it's been done to death already.

[Allan(nb Albert)]

From Important Information For Licence Holders, December 2010 (this document will have been sent out as part of the licence renewal pack for boats with licences expiring on 31st January 2011)-

 

VAT RATE INCREASES TO 20%, 4TH JANUARY 2011

 

Your renewal notice includes VAT at the new 20% rate, but if your application and payment reaches us before 22 December - or you pay online on or before 4th January 2011 - we will process it at 17.5%.

 

I wonder if this is legal as the invoice point will still be the same however payment is made.

 

Needless to say my licence renewal pack arrived on the 23rd December.......

 

No apologies for quoting my own post! BW have accepted that, as my payment by cheque arrived before 4/1/2011, the 17.5% VAT rate is applicable.

 

I think they like me

[Maffi]

Even BW charged the lower rate of VAt on my boat license due on 1st Jan!!

 

Yes but only if you paid by 23 Dec, the next working day being the 4th January.

Edited January 12, 2011 by Maffi

[Allan(nb Albert)]

Yes but only if you paid by 23 Dec, the next working day being the 4th January.

 

I am told my cheque was received on 3rd January 2011

 

My understanding is that, in my circumstances (payment before services received), receipt of payment defines the tax point.

 

****** Edited to add ***** I have just been told that BW have agreed that any transaction such as mine, payment in full by cheque received before 4th January for a 12 month licence to run from 1/2/2011 is only liable to tax at 17.5%.

Edited January 13, 2011 by Allan(nb Albert)

[furnessvale]

Yes but only if you paid by 23 Dec, the next working day being the 4th January.

 

So the definition of "working day" in this case is not days other than weekends or official bank hoildays but rather days on which BW staff actually work. Not too many of those in a year then :-)

 

George ex nb Alton retired

Edited January 13, 2011 by furnessvale