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UK VAT Invoices for Deposits

started a topic 4 months ago

Hello,

As a subcontract manufacturer we take non-returnable deposits from regular customers before we start a batch of product. We use cash accounting for our quarterly VAT returns (I think the rules/workflow is subtly different for accrual-based returns for bigger firms).

Under UK VAT rules, because this deposit is non-returnable we need to issue a VAT invoice at the point where the deposit is paid, but once a quote is accepted I can't find a way to part-invoice for a production order.

(if the customer does not follow through on the order then HMRC ask you to correct it with some manual journals and submit it as a correction on a subsequent return).

Current workaround is to have a separate Service SKU and then issue a credit note, but that's a bit messy and opaque.

Are you able to build a workflow to issue an invoice for a customer credit/prepayment? I don't know what that does for accounting in other jurisdictions?


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