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HMRC internal manual

VAT Time of supply

Legislation: UK primary law (VAT Act 1994): Section 6(4) Advance payments and invoices


(4) If, before the time applicable under subsection (2) or (3) above, the person making the supply issues a VAT invoice in respect of it or if, before the time applicable under subsection (2)(a) or (b) or (3) above, he receives a payment in respect of it, the supply shall, to the extent covered by the invoice or payment, be treated as taking place at the time the invoice is issued or the payment is received.


For both goods and services a tax point is created by the receipt of a payment or the issue of a VAT invoice in advance of the basic tax point. The only exception to this is where a payment is received in advance of the ‘adoption’ basic tax point under 6(2)(c). Where a tax point occurs under section 6(4) the supply is deemed to have taken place to the extent of the amount paid or invoiced. In other words there will always be a further tax point where the amount invoiced or paid is less than the full value of the supply. For further information see VATTOS5120 and VATTOS5200.