Authenticated receipts periodic payments contract - tax points and accrual dates
Question asked by Laura Harrington 3 years ago
Hoping someone might be able to help...
We are a subcontractor working for a main contractor who issues us with authenticated vat receipts as per HMRC guidance if you make supplies, including design, advisory and supervisory services, under such a contract, the tax point is normally the time you either issue a VAT invoice or receive a payment, whichever happens first. As we receive authenticated vat receipts we don't issue a VAT invoice but we raise a bill on the system.
I only enter the bill once I receive the 'payer notice' which outlines the final date for payment i.e the date we will receive payment and the date at which VAT applies therefore this is the date I raise on the bill.
However as the the work has physically been carried out up to a month prior to the payment being issued I use the accrual date function so that all of the figures tie in i.e. materials and subcontractor payments etc and for reporting purposes on the profit and loss otherwise for example I would be accounting for work in May (payment date) that has been carried out in April.
I have noticed that when I do this, the accrual date pulls through on the VAT return and not the invoice date (payment date) so I would effectively be paying the VAT on that invoice early. How can I stop this as the tax point is the date the payment is issued but I need to use the accrual function so that reporting is correct.
Hope that makes sense
Many thanks, Laura