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HMRC internal manual

VAT Time of supply

Tax points for specific types of supply: construction: single payment contracts

Regulation 93 of the VAT Regulations 1995 (see VATTOS2370) does not apply where there is a single payment of the contract price, even if payment of a part of that price is to be delayed under a retention clause (see VATTOS9120). Supplies of this kind are subject to the normal tax point rules which includes a basic tax point on completion of the work (see VATTOS4300). This can be particularly significant where, for example, suppliers are left unpaid as a result of contractual disagreements or insolvency. Unlike most supplies covered by regulation 93, completion or cessation of the work will, in the absence of any earlier time of supply through receipt of payment or issue of a VAT invoice, create the tax point for the supply.