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Showing posts from February, 2018

Advanced Payment and Deposit Tax Invoicing

Did You Know? UK and EU VAT / Sales Tax rules mean that when you take a deposit or advanced payment for services, such as a stay in your property, that creates a tax point. This means you need to report the payment in the current VAT period and produce an invoice detailing the tax allocation. This can be quite complex, error prone and time consuming process.  Even more so if you have to deal with different Tax Rates for different invoice items. More information from HMRC https://www.gov.uk/guidance/vat-instalments-deposits-credit-sales
Example You take a booking in April for 1 room, 2 guests with breakfast for 5 nights starting in November at £630 and right now you take 50% deposit of £315. A tax point has been created and you need to report the receipt of £315 on your current VAT return and issue an invoice to the guest. 
Lets assume this is the breakdown of the chargeable services: room rate : £96 * 5 = £480 (gross, inc VAT)breakfast : £15 * 10 = £150 (gross, inc VAT) How do you all…