Section 1-263(a)-4(f), taxpayers are not required to capitalize prepaid expenditures for “any right or benefit for the taxpayer that does not extend beyond the earlier of-ġ2 months after the first date on which the taxpayer realizes the right or benefit or There is an exception to that, however, in certain circumstances. So the general rule is that all prepaid expenses must be capitalized. If the insurance contract runs for a longer period, you need to take the deduction over time. Prepaid insurance premiums are deductible when paid as long as they don't apply to a period extending more than 12 months after the end of the taxable year when the payments were made.

So even though the rent payment was for the next year, you should include this rental expense in the current year. This would mean that the VAT is payable to the British government (and reclaimable if the customer is VAT registered in Britain).As a cash-basis taxpayer, you report income as it is received. British VAT is probably applicable, in which cases a British VAT number should be quoted on Dropbox invoices.ĭropbox should supply a VAT invoice with a British VAT number on it. Ī search shows that Irish VAT is not applicable to supplies such as these outside the EU, because the place of supply is considered to be where the service is used (not supplied).

The UK left the EU to all intents and purposes on 1 January 2021.īusinesses providing digital services to Britain from outside Britain are obliged to register for British VAT from that date and their invoices should show a British VAT number: 'If you’re selling digital services from the EU to the UK you will need to register and account for VAT.' from paragraph 2.5 on.

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