V3.501 Meaning of “output tax”

Part V3 Supplies, acquisitions and imports

V3.501 Meaning of “output tax”

Introduction to output tax

V3.501 Meaning of “output tax”

Supply or acquisition of goods or services

Supply of goods or services

VAT is charged on the following supplies made by a taxable person1


    (a)     supplies of goods and services which meet the conditions described in V3.101; and


    (b)     transactions within V3.211–268 (deemed supplies) which are treated as supplies of goods or services.

VAT on supplies of goods and services made by a taxable person is known as “output tax”2.

Acquisitions of goods

VAT is charged on any goods acquired from another EU member state by a taxable person if the conditions described in V3.361 (“The charge to tax”) are met3. VAT on the goods acquired is known as “output tax”4.

For VAT due on acquisitions from other member states, see Division V3.3.

Value of supply/acquisition

Tax is charged by reference to the value of the supply or acquisition as determined in accordance with the statutory provisions5. Where a supply or acquisition is made for a consideration, its value is the amount that, with the addition of the VAT chargeable, is equal to the consideration6.

For a more detailed description regarding the value of supply/acquisition (including those valued by reference to the open market value), the treatment of discounts and other exceptions, see V3.151–V3.166.

Recovery of output tax or amounts described as VAT

HMRC may recover an amount from a person if he issues an invoice which shows a supply of goods or services as taking place with VAT chargeable on it7.

This applies even if—


    (1)     the invoice is

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