Sales spanning 1 December

HMRC have published new guidance, including further detail on sales that span 1 December. See http://www.hmrc.gov.uk/pbr2008/measure1.htm

Key points:

(1) Will you be invoicing in December for goods and services provided (or cash received) before 1 December?

There are specific rules, including an extention from 14 to 30 days for certain invoices.

(2) Did you invoice or receive cash for products or services that hadn't been supplied in full by 30 November?

In this case you can optionally refund the change in VAT, often just by issuing a credit note.

Where you supply "continuous services" such as maintenance or membership that have been prepaid or invoiced in advance, the relevant portion of the VAT can be optionally refunded.

(3) Do you provide services under quarterly or monthly instalments?

If these qualify as "continuous services", instalments on or after 1 December should be at the new rate of 15%. Recurrent invoices and direct debits should be changed.

Items dated 1 December may well be incorrect, and require adjustment.

(4) When you claim VAT on till receipts issued on or after 1 December, this should be at 3/23 of the VAT-inclusive value of relevant items regardless of the VAT amount shown on the receipt. This is because HMRC acknowledge that not all retailers will have been able to adjust their tills by 1 December.

You can continue to claim 7/47 on receipts dated prior to 1 December.