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HMRC internal manual

VAT Time of supply

Basic tax points: Goods: Removal of goods

Under section 6(2)(a) of the VAT Act 1994 (see VATTOS2215) the basic tax point for a supply of goods occurs on ‘removal’. There is normally little problem in establishing the basic tax point where the supply involves goods that are to be removed in the course of the supply. Difficulty can sometimes occur where there is more than one supply, but only one movement of the goods. This can be the case, for example, where the goods are supplied via a third party such as a finance company. Where this happens it is first necessary to determine which of the supplies the removal relates to. This will usually be evident from the contractual obligations of the parties involved.

Removal normally occurs when the goods are sent out for delivery by the supplier or somebody acting on the supplier’s behalf, or on collection by, or on behalf of, the customer. In either event, where this represents the basic tax point, it is a question of fact that should be apparent from the supplier’s records.

One further situation that can be encountered is a single supply of goods where delivery/collection of the goods takes place in batches over a period of time. Provided there is genuinely a single supply, as opposed to a succession of separate supplies, the basic tax point will not occur until the time of removal of the final consignment or batch. In the meantime tax points will be created in the normal way by the issue of a VAT invoice or the receipt of a payment in advance of the basic tax point.