V3.523 Self-billing invoice


Under a self-billing arrangement, the customer makes out VAT invoices on behalf of suppliers who are registered for the purposes of VAT. The customer retains one copy (which he uses as evidence supporting his claim for input tax credit) and sends a copy to his supplier (who uses it to calculate his output tax liabilities)1. It should be pointed out that the self-billing arrangements are merely a facilitation measure and do not transfer the responsibility for accounting for VAT, or even assessing the liability of the supply in question, from the supplier to the customer. Although HMRC have the power to direct, under VATA 1994 s 29 (see V3.502), that the customer account for any VAT understated on a self-billed invoice, this is an administrative discretion and cannot be relied upon by the supplier2.


VATA 1994 Sch 11 para 2B provides that a self-billed invoice provided by a taxable person to himself which purports to be a VAT invoice issued by the supplier may be treated as such for the purposes of VATA 1994 Sch 11 para 2A, subject to compliance with such conditions as may be3


    (i)     prescribed;


    (ii)     specified in a notice;


    (iii)     imposed in a particular case in accordance with regulations.

For the purposes of the time of supply rules, the issue of a self-billed invoice is not regarded as issued by the supplier, and therefore does not create a tax point where it is issued in advance of the basic tax point4. However,

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