Hi, I have a question re: taxes… Let’s say I received an invoice from a freelancer last October, but only paid him this month. He’s charged me VAT, does that VAT appear in the October period when I received the bill, or in the current period when I actually pay him? Bullet seems to put it in Octover, but I’d prefer if it could come out in this period, if that makes sense?
So there are two ways you can do VAT. Cash basis (when the cash hits your account) or Invoice bases (when the invoice is sent).
We operate Bullet on a Cash basis for the following reasons.
- It helps cashflows as you’re liable for tax the minute you receive Bill or send an Invoice.
- It’s how 99% of all SMB businesses run.
So the liability will be calculated when you mark that bill as paid. If you want to bring it into a different period, just change the time of payment.
But, revenue define your tax periods not Bullet. It’s also not good practice to mess around with VAT payments it can get complex and you’ll need to engage with an accountant to manually fix any VAT issues.
We’ve designed the Bullet workflows to work really well for you and to reduce the amount of accountant engagement you need.
Hope that helps.