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HMRC internal manual

VAT Time of supply

Legislation: UK secondary law (VAT Regulations 1995): Regulation 91 royalties and similar payments


91 Where the whole amount of the consideration for a supply of services was not ascertainable at the time when the services were performed and subsequently the use of the benefit of those services by a person other than the supplier gives rise to any payment of consideration for that supply which is -

(a) in whole or in part determined or payable periodically or from time to time or the end of any period,

(b) additional to the amount, if any, already payable for the supply, and

(c) not a payment to which regulation 90 applies,

a further supply shall be treated as taking place each time that a payment in respect of the use of the benefit of those services is received by the supplier or a VAT invoice is issued by the supplier, whichever is the earlier


This applies to supplies of rights, where the consideration takes the form of royalties and the like, and where the extent of those royalties is dependent on future events. This type of supply frequently arises in the entertainment industry where regulation 91 will apply to royalties generated, for example, by record sales. It is often necessary to confirm the precise nature of the supply before deciding whether this regulation applies. For further information see VATTOS9500.