A vat scenario I am looking for assistance with
I have a new customer in the UK who I am looking to sell manufactured goods to from my supplier in Asia
I get the goods made and shipped directly to my customer – my customer pays me, I pay the supplier
I will get paid in 4 stages before the goods are shipped (30/30/30/10%)
The scenario;
1. I WIN AN ORDER FOR £250,000
2. I INVOICE CUSTOMER 30% OF TOTAL IN JANUARY – I PAY VAT ON THIS TOTAL IN THIS VAT QUARTER OF £15,000
3. I INVOICE CUSTOMER 30% OF TOTAL IN MAY – I PAY VAT ON THIS TOTAL IN THIS VAT QUARTER OF £15,000
4. I INVOICE CUSTOMER 30% OF TOTAL IN SEPTEMBER – I PAY VAT ON THIS TOTAL IN THIS VAT QUARTER £15,000
5. I INVOICE CUSTOMER 10% OF TOTAL IN JANUARY – I PAY VAT ON THIS TOTAL IN THIS QUARTER £5,000
I have paid the above VAT in total of 20% (£50,000) over a the manufacturing period
I have paid the Asian supplier, I now ship the goods…..
6 weeks later the goods arrive at Felixstowe, I declare the goods value of £250,000
HMRC request me to pay 20% VAT (£50,000) before goods are released, in this case I will have paid VAT twice.
How can I reclaim the VAT in this instance?
Thanks in advance
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