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HMRC internal manual

VAT Time of supply

Accommodation tax points: corporate purchasing cards: background


A number of banks and card companies operate what are known as corporate purchasing, or procurement, cards. One of the features of these cards is that they are fully compatible with VAT accounting requirements.

They are intended to be used as a method of payment by corporate customers with high levels of low value expenditure. Typically they will be used when ordering such things as stationery, spare parts and other expenditure delegated to individual staff members. It is understood that they are not generally to be used for capital expenditure or the purchaseof production materials.

The practical arrangements are very similar to credit cards and charge cards. The card company or bank pays the supplier a discounted amount shortly after the transaction has taken place. Card-holders are then required to make a single payment to the card company or bank for all purchases made over a given period. This is in much the same way as charge card holders are required to pay their monthly statement in full. In the case of corporate purchasing cards the documentation provided by the card company or bank replaces the VAT invoice normally issued by the supplier.

Tax point issues

As the VAT invoice is issued (on behalf of the supplier) by the card issuing company or bank, the supplier has no way of knowing when the invoice is issued to individual customers. Also, because the invoice may well cover supplies made over the course of a month, the supplier is unable to accurately work out the tax point for each supply. There may well be a mixture of the basic tax point and, where the invoice has been issued within 14 days after the basic tax point, the invoice date.

To overcome this difficulty those making supplies under corporate purchasing card arrangements can apply for an accommodation tax point. This allows them to treat the date the details of each transaction are transmitted to the card company or bank as the tax point. But this is subject to the details of all transactions being keyed into the system no later than the basic tax point date.