A business delivers goods to a customer on 20 June and issues the VAT invoice on 28 June. It is not paid until 30 July. There was no earlier payment or invoice. What is the tax point?
Answer and explanation
Correct answer: A. 28 June
- Step 1: The basic tax point is the date goods are delivered, 20 June.
- Step 2: If a VAT invoice is issued within 14 days after the basic tax point, the invoice date becomes the actual tax point.
- Step 3: The invoice was issued 8 days later, so the tax point is 28 June.
Answer
28 June.
Why not the others: 20 June is the basic tax point, but the invoice was issued within 14 days, so the invoice date applies. Payment after the invoice does not change the tax point. 14 July is not a tax point on these facts.
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