Time of supply (tax points)

Produced by Tolley

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Time of supply (tax points)
  • Why are tax points important?
  • Basic tax point
  • Actual tax point
  • 14 day rule
  • Accommodation tax points
  • Continuous supplies of services
  • Change in VAT rate
  • Specific transactions
  • Intra-EU supplies of goods (prior to 1 January 2021)
  • More...

Time of supply (tax points)

The time of supply or the tax point is the date that a transaction takes place from a VAT perspective. Businesses are required to either account for VAT or recover VAT on the VAT return covering the period in which the supply takes place. There are different tax points for supplies of goods and services and this note provides an overview of the main principles.

Why are tax points important?

Businesses need to ensure that they get the tax point date correct for the following reasons (this list is not exhaustive):

  1. businesses are required to ensure that the correct tax point date is included on sales invoices issued

  2. the tax point date determines the date upon which a business can recover any input tax incurred - see the Claiming input tax guidance note

  3. the transaction should be included in the books and records in the period that covers the tax point date - see the VAT record keeping requirements guidance note

  4. the correct amount of VAT must be charged on the sale if there is a change in VAT rate at the time the transaction takes place

  5. if the business is nearing the VAT registration threshold it will need to understand the tax point date in order to determine the correct date it was required to be VAT registered - see the Overview - registering for VAT guidance note

  6. if the business is determining whether it can deregister because it will be trading below the VAT registration threshold, then it needs to understand the tax point date of supplies made so it can ascertain the date its turnover met the deregistration requirements - see the Cancelling a VAT registration number guidance note

  7. if the business is partly exempt, then it needs to understand the tax point rules when undertaking its partial exemption calculations - see the Partial exemption ― overview guidance note, and

  8. the business needs to ensure that the sales and

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