First Previous - Page 1 of 1 - Next Last

Payments in Instalments

  • Affiliate
  • 1 post
  • # 117166

Hi, I have a client who's customers pay for their product in instalments.  They want to raise an invoice for each instalment as it's due and therefore pay the VAT on the element that is due for payment.  In past experience, the invoice is raised in full so that there is a record of the full amount due by the customer and then each instalment is paid off of this invoice.  There is something on HMRC website allowing for instalment invoices but I'm not sure then how to record the fact the further money is due. ie the cost of the item is £2000.00, a £500 deposit is paid, with the remaing monies paid off as & when before the deadline date, which is normally 18 months

  • Member
  • 2 posts
  • # 117189

Hi Emma, I’m not sure if this will help but hopefully so.  I work for a client in the construction industry and they have to record retention monies owed to them, paid usually 18 months to 2 years later. When they are paid, say £10,000 they might have £500 deducted and withheld as retention monies until the contract is complete. So I would record their payment at the time of £9500 plus vat, and then another invoice for £500 no vat. The £500 sits on the customer account so we can see what’s owed and then, when the contractor releases the retention monies plus vat, I would put a vat only invoice on and pay this off with the retention amount.  I thought this would work for your customer’s instalment plan so hope that is useful for you.

First Previous - Page 1 of 1 - Next Last
loading