HMRC internal manual

VAT Time of supply

Actual tax points: VAT invoices: issuing a VAT invoice

Time of supply law consistently refers to the issue of a VAT invoice. This means that to create a tax point an invoice must be physically handed over. It is not sufficient for it to simply have been prepared. It must have been sent or given to the recipient. This was considered by the High Court in the case of Woolfold Motor Co Ltd([1983] STC 715). When it was announced that the VAT rate was to be increased from 8% to 15% from 18 June 1979, Woolfold had orders for new motorcars that it was unable to fulfil until after 18 June. It therefore tried to preserve the 8% rate of VAT for those supplies by ‘issuing’ what the law then referred to as tax invoices prior to 18 June. In over turning an earlier Tribunal decision, the High Court held that drawing up the invoices, showing them to, and agreeing them, with the customers before the 18 June, did not amount to their having been issued at that time. This only occurred when the company finally handed the invoice over to the customer when the car was delivered.

Where an invoice has been issued it is the date of physical issue that determines the taxpoint. This can be significant where there is an unexpected delay in it being sent out. Where this happens the tax point is the date the invoice was actually issued and not the date it was expected to have been issued. In the case of invoices issued by electronic data interchange (EDI) an invoice is issued when the data is transmitted, provided the recipient is able to receive the data.

It is a requirement under regulation 14 of the VAT Regulations 1995 that a VAT invoice should show both the time of supply (tax point) and the date of issue of the invoice.These dates may, or may not, coincide depending on what actually created the tax point for the supply. The presence of this information assists not only in ensuring that the time of supply rules are being applied correctly, but also in confirming that the issuer is conforming to the statutory requirements of regulation 13(5) that a VAT invoice be issued within 30 days of a tax point.