HMRC VAT Calendar

HMRC have to organise us, the VAT collectors. They have a specific timetable for us. This timetable divides the year into VAT quarters. There are other arrangements like monthly returns or arrangements for annual accounting neither of which we cover here.

When a business sells a good or completes a service, a tax point is created. This is a marker for a VAT liability, which will be dealt with at the end of the VAT quarter.

As shown in the calendar, at the end of the quarter, the VAT owed to HMRC is declared in a Calculate a VAT Return (see below). The payment becomes due shortly afterwards.

I will probably type this ten times in this section - VAT becomes payable whether you have received payment or not from your customer. This becomes even more of an issue where you never get paid. The Bad Debt Treatment and Cash Accounting Scheme can make this less of a threat.

This section has led to a debate on how invoicing impacts the tax point. The rule I have been given is that where, as a rule, I invoice within 14 days of completing the service, then the tax point becomes the invoice date rather than the service delivery completion date. If I invoice beyond 14 days then the tax point stays as the service delivery completion date.