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HMRC internal manual

VAT Time of supply

Introduction: purpose of the time of supply rules

The time of supply rules fix the time at which a supply is treated as taking place for VATpurposes. Although often referred to as the ‘tax point’, this is not a term that is actually used in the legislation. A supplier becomes liable to account for VAT once atax point has occurred and must include it on the return covering the period in which the tax point falls. However there are other purposes to which the time of supply rules are put. These include

  • calculation of turnover for VAT registration purposes
  • establishing the period to which supplies (including exempt supplies) are to be allocated for partial exemption purposes, and
  • establishing when input tax may be deducted.

It is a fundamental principle that, although a tax point can establish when VATbecomes due, it cannot determine if VAT is due. In other words, it is notenough simply to say that VAT must be accounted for because somebody has received apayment, you must also satisfy yourself that a supply has been made. It may also be necessary to consider the liability of the supply.