Wrong, holding stock as a manufacturer costs a fortune. We don't make stock because as soon as it is a finished item V.A.T is due if its sold or not. If its not sold, its cost to make and you have to pay tax on it,(
Output VAT normally arises on the 'tax point' date - the date of supply, with payment being made to HMRC at the end of each 3 month period. I've never heard of VAT being charged on items manufactured for stock. Is this some special scheme or situation your firm is working under?