Are there any rules about post dates and payment by cheque for a licence
which runs from the 1st January, what should the prevailing rate be?

In this case a cheque was posted on the 30th December, with a witness,
though no proof of posting, yet I have a balance owing on the difference
between the rates of VAT, such that the cost is based on the current rate.

I thought where payment was before the cut-off date, the receipt of a cheque
was deemed to be date of payment (in my days of VAT cash counting), then the
rate of VAT would be that prevailing on the date of the receipt of the
cheque.

I also thought that items were deemed to be delivered the day after posting,
or is that only in favour of government departments?

On Jan 17, 11:32*am, "Fredxx" wrote:
Are there any rules about post dates and payment by cheque for a licence
which runs from the 1st January, what should the prevailing rate be?

In this case a cheque was posted on the 30th December, with a witness,
though no proof of posting, yet I have a balance owing on the difference
between the rates of VAT, such that the cost is based on the current rate..

I thought where payment was before the cut-off date, the receipt of a cheque
was deemed to be date of payment (in my days of VAT cash counting), then the
rate of VAT would be that prevailing on the date of the receipt of the
cheque.

I also thought that items were deemed to be delivered the day after posting,
or is that only in favour of government departments?


There are rules at HMRC website and there are some ifs but in general,
the earlier of the two dates either the supply goods/services or
payment determines when the contract took place. In the event of
payment (or part payment) the VAT is based on the actual amount paid
therefore the balance (if any) will be at the new rate. However they
do have a right to charge you the new standard rate.

Fredxx wrote:

Are there any rules about post dates and payment by cheque for a licence
which runs from the 1st January, what should the prevailing rate be?

In this case a cheque was posted on the 30th December, with a witness,
though no proof of posting, yet I have a balance owing on the difference
between the rates of VAT, such that the cost is based on the current rate.

Did you make a voluntary payment in advance of being invoiced, or was your
payment made as a result of you having been given an invoice? What is the
invoice date?

I thought where payment was before the cut-off date, the receipt of a
cheque was deemed to be date of payment (in my days of VAT cash counting),
then the rate of VAT would be that prevailing on the date of the receipt
of the cheque.

I think that's correct. More generally, the date which determines the VAT
rate is the earliest of three:

1) When the supply is actually made,
2) The invoice date,
3) When payment was received.

If payment was not received until 4th January or later (which does seem
likely), then that's too bad, but it may not matter.

It seems highly likely that an invoice for a licence which runs from 1st
January would be issued well before 1st January.

Even if the licensing authority were to invoice late, i.e. on or after
4th January, I would think that actual supply of a licence running from
1st January would be deemed to have been made on 1st January, and the old
rate still applied on that day.

So I think that at least (1), and probably (2) would be prior to 4th
January, even if (3) isn't. Therefore the old rate should apply.

I also thought that items were deemed to be delivered the day after
posting, or is that only in favour of government departments?

I reckon it's actual, not deemed, receipt which is relevant. There may
also be a question mark in the case of cheques, whether "payment received"
means the cheque being in the hands of the recipient, or it having been
paid into the bank, or has been cleared.

On Mon, 17 Jan 2011 11:32:02 -0000, "Fredxx" wrote:

Are there any rules about post dates and payment by cheque for a licence
which runs from the 1st January, what should the prevailing rate be?


That is too simple.

Depending on the type pf licence, it could be 17.5% or 20%, or an
apportioned amount which would be very close to 20%..

In this case a cheque was posted on the 30th December, with a witness,
though no proof of posting, yet I have a balance owing on the difference
between the rates of VAT, such that the cost is based on the current rate.

I thought where payment was before the cut-off date, the receipt of a cheque
was deemed to be date of payment (in my days of VAT cash counting), then the
rate of VAT would be that prevailing on the date of the receipt of the
cheque.


If and only if they are using cash accounting, although even then I'm
not sure that is true any more.

Normally the tax point is the date of provision of the goods/services,
although in some cases it can be the date the invoice is raised (if
later).

For ongoing services, the rate can sometimes be apportioned over the
period of the service, so if that was an annual licence, it would be 3
days at 17.5%, and 362 days at 20%.

I also thought that items were deemed to be delivered the day after posting,
or is that only in favour of government departments?


They are deemed to be delivered on the 2nd *working* day after
posting, so if you posted on the 30th, it would be deemed to have been
delivered on the 4th..
--
Alex Heney, Global Villager
Winning isn't everything - but losing SUCKS!
To reply by email, my address is alexATheneyDOTplusDOTcom

"Richard McKenzie" wrote in message
...
On Jan 17, 11:32 am, "Fredxx" wrote:
Are there any rules about post dates and payment by cheque for a licence
which runs from the 1st January, what should the prevailing rate be?

In this case a cheque was posted on the 30th December, with a witness,
though no proof of posting, yet I have a balance owing on the difference
between the rates of VAT, such that the cost is based on the current rate.

I thought where payment was before the cut-off date, the receipt of a
cheque
was deemed to be date of payment (in my days of VAT cash counting), then
the
rate of VAT would be that prevailing on the date of the receipt of the
cheque.

I also thought that items were deemed to be delivered the day after
posting,
or is that only in favour of government departments?


There are rules at HMRC website and there are some ifs but in general,
the earlier of the two dates either the supply goods/services or
payment determines when the contract took place. In the event of
payment (or part payment) the VAT is based on the actual amount paid
therefore the balance (if any) will be at the new rate. However they
do have a right to charge you the new standard rate.

Not for a supply on 1/1/11 - rate did not come in until 4/1/11.

BTW it is the supply date (usually also the invoice date) NOT the payment
date that set the rate.

There is no certain rule.I think that the rates of VAT are in favor of government only.