Traditional Accounting for Deposit payment made to a non-EU supplier
Question asked by Katalin Kovacs 1 week ago
We import goods from a non-EU supplier.
Could you please let me know how I can account for a deposit payment which was made in December to a non-EU supplier?
The supplier provided with a Pro-Forma invoice which shows the full amount in $ and a note which says 30% deposit required. The supplier will provide with a Commercial Invoice in January.
We made the 30% deposit payment in December.
The HMRC VAT guide states that must include the value of imports in Box 7.
An HMRC adviser also said that the Pro-forma invoice does not create a tax point but as the deposit funds have been paid, the tax point is the payment date when it’s left our bank account and not the Proforma Invoice or Commercial invoice’s date. The balance payment will also incur another tax point.
Can you please let me know how I can do this transaction in clearbooks so the amount will show up in box 7 on the VAT return?