V3.141 Change of VAT rate

Election for basic tax point to apply

VATA 1994, s 88 sets out a permanent procedure for applying the tax point rules when either the rate of tax changes or a description of exempt, zero-rated or reduced rated supplies is changed1.

The procedure may be applied if a basic tax point2 falls on one side of the change and a tax point arising from receiving a payment or issuing an invoice3 falls on the other side. The supplier may elect that the rate at which tax is chargeable on the supply, or any question whether it is zero-rated or exempt, is to be determined in accordance with the basic tax point4.


This example follows the temporary (from 1 December 2008 to 31 December 2009) reduction in the standard rate of VAT from 17.5% to 15%, and mirrors HMRC's guidelines in force at that time:

Supply of goods

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