TGIT....Thank God It's Tuesday and yes it's that time of the week when we issue the next indirect tax secret. (I'm not certain TGIT will catch on, but what the hell, at least I should get points for originality).
Issue 3: Prompt Payment Discounts
I can’t tell you how many times I have seen this error made by suppliers and totally missed by their customers. It’s even worse for customers who are not VAT registered. This error is made by large and small businesses alike.
When you raise an invoice offering a discount for prompt settlement the VAT should be calculated on the discounted value regardless of whether the early payment option has been taken up by the customer or not.
This however does not apply if your terms allow customers to pay by instalments. Phew! I hope it sinks it now.
For HELLP with the above contact Marlon Appleton