Tax Points
We recently advised a business that undertakes continuous supplies of services how best to structure its invoicing and accounting to maximise its VAT position. Its contracts allowed for requests for payment to be raised instead of full VAT invoices until payment was made by its customer. In advising that the client raised requests for payment instead of full VAT invoices, we successfully moved the tax point by 90 days thereby injecting around £500K into the business.
Our Advice is to always consider when tax points are created and whether these can be used to assist cash flow.
