VAT record keeping
Time of supply or tax point
The tax point (or ‘time of supply’) for a transaction is the date the transaction takes place for VAT purposes.
You need to know this because, for example:
- it’s included on VAT invoices
- it tells you which VAT period the transaction belongs to
- it tells you which VAT Return to put the transaction on
The tax point can vary, but is usually the following.
| Situation | Tax point |
|---|---|
| No invoice needed | Date of supply |
| VAT invoice issued | Date of invoice |
| VAT invoice issued 15 days or more after the date of supply | Date the supply took place |
| Payment or invoice issued in advance of supply | Date of payment or invoice (whichever is earlier) |
| Payment in advance of supply and no VAT invoice yet issued | Date payment received |
The date of supply is:
- for goods - the date they’re sent, collected or made available (for example installed in the customer’s house)
- for services - the date the work is finished
Exceptions
If you use the VAT Cash Accounting Scheme, the tax point is always the date the payment is received.
There are different tax point rules for:
- certain trades - like barristers, building and construction
- where the supply is not a ‘sale’ – for example business items taken for personal use
Sometimes, one sale can give rise to 2 or more tax points - for example where the customer pays a deposit in advance, and then a final payment.