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My client makes wedding dresses. When a customer orders a dress she takes a deposit of half the contracted price – anywhere between £750 and £1 750. The balance is paid when the dress is delivered up to a year later.
I am confident that this is a supply of goods for VAT purposes so the basic tax point is delivery; the payment of the deposit triggers a tax point to the extent of the receipt.
As business has been bad recently my client expects turnover to be below the threshold in the next 12 months and wants to deregister. None of her customers can recover VAT and she does not mention VAT anywhere in her contracts.
Nor did she change her prices when she registered two years ago and she will not change her prices when she deregisters.
...Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
