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rafapak


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settlement discount after changes
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hi guys

I would like to ask you for help. Can you recommend any articles or webpages where they teach you how to calculate settlement discount after changes in 2015? How calculation is different after changes when compared to calculation before changes and what problems it creates?

 



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Leger


Master Book-keeper

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Hi Rafal.

There are two ways of dealing with the VAT on early settlement invoices.  The invoice itself should show the full amount of VAT, and then the company can either issue a credit note for the difference in VAT if early settlement is taken, or they can put some wording on the invoice to the affect that a credit note won't be issued and do the adjustment on their accounting software.  For the customer they should only claim the reduced VAT if early settlemnet is taken.

Full details are here but it's a bit convoluted so feel free to ask further questions if you're not sure.

https://www.gov.uk/government/publications/revenue-and-customs-brief-49-2014-vat-prompt-payment-discounts/revenue-and-customs-brief-49-2014-vat-prompt-payment-discounts

Previously a supplier would show the VAT amount applicable as if the discount was taken and applied even if it wasn't.



-- Edited by Leger on Sunday 25th of September 2016 12:37:34 AM

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John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
rafapak


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Posts: 396
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thanks for reply

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