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HMRC internal manual

VAT Time of supply

HM Revenue & Customs
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Tax points for specific types of supply: construction: self- billing

Self-billing arrangements are common in the construction industry, particularly in the case of supplies by sub-contractors to a main contractor. The issue of a self-billed invoice for construction services does not create a tax point where

  • the supply falls within the scope of regulation 93 of the VAT Regulations 1995 (see VATTOS2370)
  • it is issued in advance of the basic tax point for a supply under a single payment contract, or
  • it is in respect of a retention payment to which regulation 89 applies (see VATTOS5170).

Because of this, there are special arrangements under which the issuer of these self-billed invoice can deduct input tax against a notional tax point. This is based on an assumed date of receipt of the payment by the recipient of the self-billed invoice. It must be stressed that this applies only to input tax deduction. For all other purposes the tax point for the supply remains the date of receipt of the payment by the supplier. Under this procedure the main contractor retains a copy of the invoice and shows on it the day following the date of issue as the notional tax point. On the sub-contractor’s copy the main contractor is required to show the date of despatch but this must not to be referred to as the tax point. On receiving the invoice and payment, the sub contractor must add the date of receipt, which becomes the tax point for output tax purposes.

For more information about self-billing and tax points see VATTOS5225.