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Posted Wed, 30 Nov 2022 00:28:11 GMT by Andrew DT
Dear HMRC Colleagues: How do we account for VAT on deferral revenue? We received a payment (including total VAT Amount) on 4th September (invoice date 05th Aug 2022). This is a gross Service Fee for training for the next two years. May I know the VAT point and how should we account for the VAT? Should we submit it in our next VAT return period, or spread the VAT over the next two years? Thanks.
Posted Wed, 30 Nov 2022 15:55:44 GMT by HMRC Admin 20
Hi Andrew DT,

Please refer to VAT guide (VAT Notice 700) 14.3 Continuous supplies of goods and services.

Thank you.
Posted Tue, 06 Dec 2022 20:41:40 GMT by Andrew DT
Following Up Question: Hi, thank you for your reply. The VAT guidance rule you have referred may not reflect our situation. The key issue is that we have already received the full payment including VAT, but our service will be provided over two year. The guidance "14.3 Continuous supplies of goods and services" is only appliable to the situation that "...receive payments regularly or from time to time," Should we follow "14.2.2 Actual tax points" instead? It sates that : "tax point for the amount you invoice or receive is the date you issue the invoice or receive the payment, whichever happens first." In our case, the invoice date was 05th Aug 2022 which should be the tax point? Am I right? Thank you for your guidance. Kind regards, Andrew
Posted Wed, 07 Dec 2022 11:44:52 GMT by HMRC Admin 2

As full payment has been received, then section 14.2.2 is correct.

Thank you.

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