Commentary

V7.199 Cash accounting scheme—allocation of part payments on invoices with supplies at different rates of VAT

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.199 Cash accounting scheme—allocation of part payments on invoices with supplies at different rates of VAT

Part V7 Tax planning | Commentary

V7.199 Cash accounting scheme—allocation of part payments on invoices with supplies at different rates of VAT

Where a part-payment is received from a customer which is not directly linked to specific invoices, then the payment must be allocated to invoices in date order (earliest first). This situation is then likely to mean that one sales invoice is part paid – and if this invoice includes a standard rated and zero-rated element, then the VAT payment should be apportioned according to the percentage of standard rated sales on the invoice. See Example 4.

Example 4

Doreen uses the cash accounting scheme and has

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