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HMRC internal manual

VAT Time of supply

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HM Revenue & Customs
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Tax points for specific types of supply: land and property: delays in invoicing and payment of rent

A tax point for supplies involving long and short-term leases is normally only created by the receipt of a payment or the issue of a VAT invoice. The timing of the issue of a VAT invoice, or the receipt of a payment, has always been vulnerable to manipulation. Often this has been aimed at delaying accounting for VAT in cases where supplies are being made to a connected business not fully taxable. To prevent this, an annual tax point was introduced from 1 October 2003 by regulation 94B of the VAT Regulations 1995 (see VATTOS2385). Subject to various limitations to its general scope, this further tax point applies to some land and property based supplies. This includes car parking and holiday accommodation which are always standard rated as exclusions to item 1 to Schedule 9, of the VAT Act 1994. Not included are exempt supplies or any supplies which become taxable through exercise of the option to tax. This and other aspects of the rule are also described in VAT Information Sheet 14/03. Suppliers affected by regulation 94B can apply to vary some of the standard time limits set by the regulation. For further information about this see VATTOS9175