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UK tax point rules

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UK tax point rules

The tax point is the time when VAT becomes due. VAT due should be distinguished from VAT payable. VAT is due when the tax point occurs. VAT is payable between the day after the end of the reporting period and the due date to submit and pay the VAT return.

  • General rule: Tax point arises when the goods are placed at the disposal of the customer or when the services are completed.
  • Prepayments or advanced payments create a tax point. In these cases, VAT is due when the prepayment is made. Exceptions apply to security deposits.
  • If an invoice is issued either before or 14 days after the time of supply, the date of payment or the date of the invoice (whichever is earlier) is deemed to be the tax point. Taxpayers can apply for an exception to this rule.
  • Intra-Community acquisitions: Tax point occurs on the invoice date or the 15th day of the following month, whichever happens earlier.  
  • Import: Tax point occurs when the goods are imported according to the relevant import documents.