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HMRC internal manual

VAT Time of supply

Treatment of supplies affected by a change in VAT: Rate change from 1 January 2010: Effect of the anti-forestalling measure


The legislation was designed to have minimum impact on businesses. For example, it excluded supplies to customers able recover the VAT involved in full.

For customers unable to recover the VAT the legislation applied to payments received, or VAT invoices issued, before 1 January 2010 for goods and services to be provided on or after that date. But this was subject to one of the following conditions being met

  • the goods or services were supplied to a connected person, or
  • the supplier provided or arranged funding of the customer’s payment, or
  • a VAT invoice was issued to the customer that was not required to be paid in full within six months, or
  • the payment, or VAT invoice, exceeded £100,000 and was not normal commercial practice.

The legislation also covered the supply (before 1 January 2010) of rights or options, but only where they entitled the recipient to receive goods and services (free of charge or at a discount) on or after that date,.


The legislation created a supplementary charge to VAT for those transactions that fell within the scope of the measure. For example, in cases where a VAT invoice was issued and/or a prepayment was received before 1 January 2010 (creating an actual tax point), but the goods or services were provided on or after that date. In that event VAT of 15% applied in the normal way on the date the VAT invoice was issued or payment received, but a supplementary charge of 2.5% became due on 1 January 2010.

Further guidance

For further guidance on this please contact Place & Time of Supply team.