Commentary

V6.199 Applications for payment

Part V6 Business by business

V6.199 Applications for payment

V6.199 Applications for payment

It is common practice in the industry for contractors to seek interim or staged payments against an application for payment or similar device. The developer or main contractor will then confirm what works are to be paid for, commonly against an architect's or quantity surveyor's certificate. At that stage contractors can consider using—

  1.  

    (a)     self-billing (V3.523);

  2.  

    (b)     authenticated tax receipts (V3.524); or

  3.  

    (c)     tax invoices (V3.513).

Small contractors may prefer to consider the cash accounting scheme (see V2.199, and V6.200 at “Small businesses” below).

Self-billing

The VAT regulations provide that a self-billed invoice (ie one raised by the recipient of the supply) may be treated as the VAT invoice which the supplier would otherwise be obliged to provide (Value Added Tax Regulations 1995, SI 1995/2518 reg 13(3)).

A number of conditions must be adhered to. For details, see V3.523.

It is sometimes the case that the supplier will wish to physically create a “dummy” invoice for audit or financial accounting reasons. Agreement to the use of self-billing precludes the contractor from issuing, but not creating, an invoice. Thus if he does raise an invoice, he should not dispatch it to the customer and should retain it

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