Deferred income and Taxable person: Difference between pages

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''Accounting - Financial reporting''.
''UK VAT.''  


Income for which payment has been received by the business but which has not yet been earned.
For VAT purposes, a taxable person is someone who is, or is required to be, registered for VAT.  


 
A 'person' for these purposes is widely defined and may include individuals, partnerships, companies or another corporate bodies.
<span style="color:#4B0082">'''''Example: Five year licence'''''</span>
 
A customer pays in advance for a five year licence.
 
We would record the revenue in our income statement spread over the full five years.
 
At the end of the first year 4/5 of the total received from the customer would be Deferred income.
 
We have a liability / obligation to provide the further four years of service, for which we have been paid in advance.
 
 
Deferred income is recorded as a credit balance in the balance sheet. 
 
(The related accounting entries being DEBIT Cash and CREDIT Deferred income.)
 
 
Deferred income is a liability of the reporting entity to provide the services that the customer has already paid for.
 
 
For reporting presentation purposes it is often aggregated with Accruals as 'Accruals and deferred income'.




== See also ==
== See also ==
* [[Accrual]]
* [[Default surcharge]]
* [[Accruals accounting]]
* [[His Majesty's Revenue & Customs]] (HMRC)
* [[Accrued income]]
* [[Tax avoidance]]
* [[Balance sheet]]
* [[Tax evasion]]
* [[Credit]]
* [[Tax haven]]
* [[Debit]]
* [[Tax point]]
* [[Financial reporting]]
* [[Tax written down value]]
* [[Liabilities]]
* [[Taxable transaction]]
* [[Prepayment]]
* [[Taxpayer]]
* [[Reporting entity]]
* [[Taxpayer’s Charter]]
* [[Revenue]]
* [[Value Added Tax]] (VAT)


[[Category:Accounting,_tax_and_regulation]]
[[Category:Accounting,_tax_and_regulation]]

Revision as of 15:28, 28 September 2022

UK VAT.

For VAT purposes, a taxable person is someone who is, or is required to be, registered for VAT.

A 'person' for these purposes is widely defined and may include individuals, partnerships, companies or another corporate bodies.


See also