Payment this year or in 2019?

[Dublin_Resident]

Hi All,

I set up a services business earlier this year as a sole trader. It's been a slog getting my name out there but I am starting to make great progress and the prospects for next year are good.

I have the potential to get a fairly big client payment over the line in the next few weeks. I have not registered for VAT this year as I will not reach the threshold however I plan on registering in 2019.

My question is, should I push the client to try and get the payment before the end of 2018?

As I haven't registered for VAT this year, does this make it more attractive for the client? (as I understand it I won't be charging them VAT this year however I would have to if they pay me in 2019?)

As well as the client, does it work out better for me?

Even with this payment I won't reach the VAT threshold for this year. Does it make sense from an income tax perspective too as I haven't earned a whole lot this year but I expect to do a lot better next year?

Thanks for any advice on this.

 

[Bettyk]

From a Revenue point of the view the question would be when were the services performed to earn the money? If performed in 2018, amount should be recognised in 2018 , if not performed yet then it should not be recognised until 2019.

 

[Dublin_Resident]

Many thanks for coming back so quickly. The payment will be to sponsor a series of events I am running in 2019. Does that change things?

 

[Dublin_Resident]

I should say that I have spent the last 6 months building a community, hosting a number of events and generating enough demand and attention to interest potential sponsors in partnering with me in 2019......if that makes any difference