5. 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 (eg 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’ – eg business items taken for personal use

Sometimes, one sale can give rise to 2 or more tax points - eg where the customer pays a deposit in advance, and then a final payment.