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bigduckontax
bigduckontax, Accountant
Category: Tax
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When does the VAT liability occur payments of annual

Customer Question

When does the VAT liability occur for early payments of annual club subscriptions is it the date banked or the date the subscription becomes due.eg payment made and banked 20th July. Subscription invoice and due 1st August
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. The VAT liability for early subscription payments crystalises on receipt of the payment. You should post say Debit Cash/Bank Credit Subscriptions [80%], VAT [20%]. If you operate VAT on a cash basis the same will apply on receipt, not invoice. Otherwise all the VAT will become a liability on 1 August which may cripple cash flow if members are late in their settlements. When I ran a Club's finances the cash basis was always employed. I do hope that my reply has been of assistance.
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.