Hello, Apologies if I have used the incorrect terminology, I write being relatively new to the business side of tax / vat. We operate a business which reconditions a component from a specific motor vehicle. We sell an already reconditioned part and the customer returns the original faulty one at a later date. In order to maximise the percentage of return parts (to maintain supply) we add a surcharge/deposit to the initial sale price which is returned to the customer by way of partial refund once we receive the faulty part back at our business. The net effect is a reduction of the final sale price but this could be several weeks after the original sale. Am I correct in my research that this situation would be treated like a returnable deposit? As a company our turnover is significantly below the current VAT threshold so my question relates more to how I should be monitoring and recording these transactions with a view that our business is growing and at some point we will approach and cross the threshold - I want to ensure we are using the right basis for calculating the rolling 12 month turnover. Thank you