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HMRC internal manual

VAT Time of supply

HM Revenue & Customs
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Legislation: UK primary law (VAT Act 1994): Section 88 Supplies spanning change of rate, etc


88(1) This section applies where there is a change in the rate of VAT in force under section 2 or 29A or in the descriptions of exempt, zero-rated or reduced-rate supplies or exempt, zero-rated or reduced-rate acquisitions.

(2) Where -

(a) a supply affected by the change would, apart from section 6(4), (5), (6) or (10), be treated under section 6(2) or (3) as made wholly or partly at a time when it would not have been affected by the change; or

(b) a supply not so affected would apart from section 6(4), (5), (6) or (10) be treated under section 6(2) or (3) as made wholly or partly at a time when it would have been so affected,

the rate at which VAT is chargeable on the supply, or any question whether it is zero-rated or exempt or a reduced-rate supply, shall if the person making it so elects be determined without regard to section 6(4), (5), (6) or (10).

(3) Any power to make regulations under this Act with respect to the time when a supply is to be treated as taking place shall include power to provide for this section to apply as if the references in subsection (2) above to section 6(4), (5), (6) or (10) included references to specified provisions of the regulations.



(6) No election may be made under this section in respect of a supply to which paragraph 7 of Schedule 4 or paragraph 2B(4) of Schedule 11 applies.


(8) References in this section -

(a) to a supply being a reduced rate supply, or


are references to a supply …… being one on which VAT is charged at the rate in force under section 29A.


Section 88(1)-(3), (6) and (8) sets out the special rules that can be adopted for supplies that take place around the time of a change in VAT rate or liability. Suppliers may opt to use the rate of VAT in force at the time of the basic tax point where this is different from the rate that would otherwise be applicable under the normal tax point rules. But this only applies to the rate of VAT. For all other purposes the normal tax point rules continue to apply. So, for example, in the case of a supply where the tax point would normally be the issue of an invoice 10 days after the basic tax point, this continues to be the time at which the VAT must be accounted for. But if, in the meantime, there has been a change in VAT rate or liability, the supplier may choose to invoice the supply at the VAT rate applicable at the time of the basic tax point.

There are some limitations and, under 88(6), this facility cannot be adopted for supplies subject to self-billing arrangements or where the supply involves goods disposed of by a third party in satisfaction of a debt. Further details about disposals of goods in satisfaction of debts can be found in manual covering supply and consideration.

Section 88(3) brings supplies that are subject to the time of supply regulations potentially within the scope of these change of rate arrangements. This is activated by regulation 95 of the VAT Regulations 1995 (see VATTOS2390). Section 88(8) defines ‘reduced rate’ for the purposes of the section. For further information see VATTOS7200.