VAT—time of supply of land
Produced in partnership with Martin Scammell
VAT—time of supply of land

The following Tax guidance note Produced in partnership with Martin Scammell provides comprehensive and up to date legal information covering:

  • VAT—time of supply of land
  • Why does this matter?
  • General rules
  • Sales of property
  • Sales of property—unascertainable consideration
  • Letting of property
  • Letting of property—connected persons

This Practice Note is about the VAT time of supply rules for property transactions. For an explanation of the general VAT time of supply rules, see Practice Note: VAT time of supply rules—when is a supply made?

Why does this matter?

VAT is payable to HMRC on the VAT return for the period when the time of supply, or ‘tax point’, arises.

If this is before the customer has had to pay the VAT to the supplier, the supplier will be out of pocket and will need to finance the VAT amount. Solicitors need to be aware of when VAT is going to be due to HMRC, in order to ensure that this does not happen, or at least that the client knows it is going to happen. Sometimes it can be a good idea for the parties to negotiate when the VAT amount is paid, in order to manage cashflow for both of them.

The time of supply rules can also be relevant in other ways, for example when the VAT rules change, or in determining when a buyer needs to comply with the conditions for a transfer of a going concern (see Practice Note: Transfers of a going concern involving land and buildings).

General rules

The basic tax point arises when goods are delivered or made available, or services