VATTOS6320 - Accommodation tax points: exempt supplies of credit: approval procedure

Alternative tax point

Application and approval

Specimen application

Form of direction

Alternative tax point

Provided the time nominated as the tax point for the supply of the credit is earlier than would otherwise be the case under the normal rules, a direction may be issued under section 6(10)(a) VAT Act 1994 (see VATTOS2245). For supplies of credit in conjunction with a supply of goods, the accommodation tax point might, for example, be linked to the tax point for the supply of the goods. For a loan of money, a convenient tax point might be the date of the agreement or any other date provided it occurs before receipt of the first instalment.

Application and approval

Applications for a direction should be made in writing, using a normal business letterhead and signed by a person eligible to sign the VAT returns. In the case of group registrations, the application must be made by the representative member. A suitable form of application is set out below which may be used where appropriate. Other forms of application may be accepted provided they contain the following information

  • the identity of the supplier
  • details sufficient to identify precisely which supplies are intended to be covered by the direction, and
  • the event to be treated as the tax point for the supply.

Applications involving different tax points for different categories of exempt supplies of credit are acceptable provided they can be identified without difficulty. This can either take the form of separate applications and directions for each category of supply or they can be dealt with jointly using a single application and direction.

Provided you are satisfied with the application and it is workable, a direction may be issued to the applicant. The direction should be issued in the form set out below, subject to any necessary adaptation. A copy of the direction should be retained on EF.

Specimen application

I/We request that [my/our exempt supplies of credit] [exempt supplies of credit by all members of the VAT group registered under number ………………..] [specify other circumstances eg supplies made by certain members of a group] under fixed rate [hire purchase] [lease purchase] [credit sale] [conditional sale] [loan] agreements be treated as taking place when [the agreement in question is signed by me/us/the member of the VAT group making the supply] [the loan is made] [other specified events]. [deletewords in square brackets as appropriate]

Form of direction

To: (name and address of applicant)

VALUE ADDED TAX – TIME OF SUPPLY

In response to your request dated ……………………….. the Commissioners for Her Majesty’s Revenue & Customs, in exercise of their powers under section 6(10) ofthe Value Added Tax Act 1994, hereby direct that [your exempt supplies of credit] [exempt supplies of credit by all members of the VAT group registered under number……………………………] [specify other circumstances] under fixed rate[hire purchase] [lease purchase] [credit sale] [conditional sale] [loan] agreements betreated as taking place when [the agreement in question is signed by you/the member of thegroup making the supply] [the loan is made] [other specified events] being in every case atime earlier than would have been applicable apart from this direction. This direction remains in force until you request otherwise or it is revoked. [delete words insquare brackets as appropriate]

Date:

Signature:

For and on behalf of the Commissioners for Her Majesty’s Revenue & Customs