Question about paying for wedding early to avoid vat increase?
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lyndasharp
Posts: 649 Forumite
in Cutting tax
We're getting married in March and were hoping to pay for everything before the VAT rate goes up. As we don't have final numbers there may be a slight adjustment next year, however we would be more likely to overpay rather than underpay. The venue has said the following:
"I do not believe paying in advance would avoid the VAT increase, as any monies paid in advance would be treated as a deposit and deducted from the final invoice which will be charged at the current rates."
Is this correct in our case? If we were given a final invoice by the venue and just had an adjustment afterwards, would that work?
Thanks!
"I do not believe paying in advance would avoid the VAT increase, as any monies paid in advance would be treated as a deposit and deducted from the final invoice which will be charged at the current rates."
Is this correct in our case? If we were given a final invoice by the venue and just had an adjustment afterwards, would that work?
Thanks!
Live on £11k in 2011
0
Comments
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No.
The tax point is the date the goods or services are provided.0 -
No.
The tax point is the date the goods or services are provided.
Actually I don't think this is true. For transactions where a VAT invoice is issued and payment is received in advance, the time of supply is the date the payment is received or the date the invoice is issued - whichever is the earlier. Therefore in this case if the venue was to issue a VAT invoice now and it was paid in full then the VAT rate should be 15%.
There is some legislation about this to try and stop people paying VAT at 15% rather than 17.5% (or possibly higher?) but I've had a quick look through it and I don't think it will effect the OP.0 -
HMRC Guidance Sheet, pretty much as Rolo Tomasi says, just posted link for reference
http://www.hmrc.gov.uk/vat/forms-rates/rates/rate-rise-guidance.pdf#sec411Please remember other opinions are available.0
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