For example, if you take a deposit as security to ensure the safe return of goods you have hired out, and the deposit is either refunded when the goods are returned safely or forfeited to compensate you for loss or damage, then no tax point is created. To help HMRC to give you the best service, always give the full facts. You can call the VAT general enquiries helpline for further details if necessary. Remember, if you do have monthly tax periods, you will have to make 12 returns a year instead of 4. This rule applies only to supplies for which the tax point was determined under the rules described in paragraph 14.2. It also gives information about various services provided by site operators and mooring owners. Officers aim to carry out their duties with as little inconvenience to you as possible. For more information see the VAT: costs or disbursements passed to customers guide. HMRC will not credit or repay any amount where to do so would result in your unjust enrichment - for example, where you passed the tax on to your customers but are unwilling, or unable, to pass on to them the benefit of the repayment. It explains the rules for working out the time when a supply of goods or services is treated as taking place. Machine games that are liable to Machine Games Duty are exempt from VAT. The supplies that you arrange are made by, or to, the principal you represent. If no such purchase price can be ascertained then the value is what it would cost to purchase goods similar to, and of the same age and condition as, the goods in question. Find out how HMRC uses the information we hold about you. Easy to operate and simple to read. You can ask for monthly tax periods if you normally expect to receive repayments. There are special rules for private use of road fuel. The seller (the person with the right to sell the goods) must account for the tax and issue the documents described in paragraph 18.4.1. Land and property (VAT Notice 742) explains the issues relating to sales, leases, licences, rights over land, sporting and mineral rights and parking facilities. You may, if you wish, ‘outsource’ the physical responsibility for the issuing of your sales invoices to a third party. If these costs have been incurred by suppliers in the course of making their own supply to their clients, then they must be included in the value of those supplies when VAT is calculated. You will find details of the special invoices you have to use in the: You can extend the 30 day time limit without applying to HMRC in the following cases: In all cases other than those mentioned above, or if you have any doubt, you must apply for an extension of the time limit by writing to the VAT Written Enquiries Team. It’s in 3 sections: The tax value of a supply is the value on which VAT is due. This is called the consideration. The agent must issue a VAT invoice to the buyer showing: The agent accounts to HMRC for £20.00 output tax. You can treat the VAT on goods that you obtained or imported before you were registered as if it were input tax. To help you work out when you need to set up your payments (such as setting up a Direct Debit Instruction) or when you need to make your VAT payments, you can use the VAT payment deadline calculator. The summary must allow you to produce separate totals for each tax period of the amount of VAT: (a) you have been charged on goods and services you have received - including VAT paid or subject to postponed accounting at import or on removal from warehouse. Although the bank’s supply may be exempt from VAT, the fee when re-charged, even though at cost, is part of the value of the solicitor’s own supply of legal services to the client and VAT is due on the full amount. Separate rules apply for working out the place of supply for goods and services. If you hold an invalid invoice the first thing you must do is go back to your supplier and request an invoice which meets these requirements. Although each division is given its own registration number, it’s the corporate body as a whole that’s registered. For more information and a list of these concessions see VAT Notice 48: extra statutory concessions. Some supplies made by or to charities are zero-rated, some are reduced-rated, some are standard-rated and some exempt. For more information on time limits and how to correct errors see How to correct VAT errors and make adjustments or claims (VAT Notice 700/45). If you issue VAT invoices covering periods up to one year ahead, giving the amounts and dates when payments are due, they’re no longer valid for any payments due after the change. You might: But, provided that the invoicing for the supply is between the principal and the customer, the only supply for VAT purposes being made by you will be the provision of your services to your principal. But, sometimes VAT has to be calculated from a price in which it is already included (for example, in the less detailed VAT invoices described in paragraph 16.6.1). VAT self-billed invoices must include the reference ‘self billing’. The payment cannot be reclassified if the supply is unfulfilled, so cannot be treated as outside the scope of VAT. If you’re partly exempt, you must work out how much VAT you can treat as input tax before you deal with any partial exemption calculations (see paragraph 13.1). You might offer someone a ‘gift’ on condition that they: Goods and services supplied in these circumstances are not true gifts and VAT is due on the basis explained in paragraph 7.4. It’s not to the finance company, even though that company may pay you direct. You must also hold the associated evidence to claim deduction of input tax. See also The single market (VAT Notice 725) - for the tax value of acquisition of goods and Imports (VAT Notice 702) - for the tax value of imported goods. New products first. The section includes information on basic and actual tax points. All taxable persons must keep and preserve certain records and accounts. Capital items do not include assets held for re-sale. Fees that relate to goods - such as option fees or fees for transfer of title - are not exempt unless the charge for them is £10 or less. The following notices explain when supplies of freight and passenger transport, and supplies in the ship and aircraft construction and repair industry can be zero-rated. The consultant must account for output tax on the full value of this supply. You may also register for VAT voluntarily if you’re trading below these thresholds. HMRC has powers to recover money owed if you neglect or refuse to pay it, by taking distraint action (seizing your goods and selling them at auction in settlement of the tax, interest and costs). Whatever formula you use, the input tax is only reclaimed provisionally at the end of each tax period. Supplies made outside the UK are outside the scope of UK VAT. Otherwise you may find that you are not accounting for VAT properly. It’s the practice in some trades and professions for some or all of the costs incidental to a supply, such as travelling expenses, to be described as disbursements and shown or charged separately on the invoice issued to the client. If you’re unable to claim input tax in the normal period because you do not hold the necessary evidence you should claim the input tax on the VAT Return for the period during which you receive that evidence. For more information see Group and divisional registration (VAT Notice 700/2). The following notices set out the various procedures which allow goods, normally standard-rated in the UK, to be zero-rated as exports: Food products (VAT Notice 701/14): food explains which supplies of food and drink for human consumption are zero-rated and which are standard-rated. you receive a VAT invoice on which tax has been charged at the old rate, can treat as input tax only the actual amount of VAT shown, the amount of tax is not separately shown (for example, if you receive a less detailed VAT invoice - see, should work out your input tax by applying the VAT fraction which was appropriate at the tax point, you receive continuous supplies of services invoiced to cover a period up to one year ahead of the supply, Multiply (c) by the standard rate of VAT: £40 × 20% = £8, can reclaim the input tax provisionally, subject to the normal rules, should make an adjustment by making the same calculation using your total figures for the year, 31 March, 30 April or 31 May depending on the tax periods that you have been allocated, a guide to all the main VAT rules and procedures, references to more specialised publications, rates of VAT chargeable on particular goods, requests for publications or forms where they’re available in a printed format, requests for duplicate returns for businesses that still make paper return submissions, the purpose of visits that you’ll receive from VAT officers and what you can expect, what HMRC can do in cases of misunderstanding, misdirection or departmental error, your rights as a taxpayer and how to complain, discuss with you the various aspects of your business, give an indication of the length of the visit, advise you of overpayments as well as underpayments, tell you that you have the right to a review of their decision by an officer not previously involved in the matter or to appeal to an independent tribunal - if you opt for a review you can still appeal to the tribunal after the review has finished if you’re unhappy with the outcome, advising HMRC early of the reasons for any significant changes in the tax or duties declared by you - you should do this by writing to the, keeping your records and payments up to date, providing HMRC with any information and explanations requested, asking if you’re unsure of any matter connected with the tax - HMRC will not normally have time to look at all aspects of your records and business, so you cannot assume that you are accounting for the tax or duty correctly on everything just because no errors are found, helping HMRC to understand your business and records, replying to enquiries within the specified time, quoting your VAT number when you contact HMRC, were prevented from recovering VAT at the proper time, that are not specifically exempted or zero-rated, made by someone who is not a taxable person, made outside the UK and the Isle of Man (see, not made in the course or furtherance of business, transfer them under an agreement such as a hire-purchase agreement - but not if you transfer such an agreement, provide water or any form of power, heat, refrigeration or ventilation but not if you hire out equipment which does this - that is a supply of services (see, supply a major interest in land, broadly speaking, the freehold, or in Scotland the dominium utile, or a lease exceeding 21 years (see, transfer goods permanently out of the business for your private use, lend goods to someone for use outside your business, produce goods from someone else’s materials, use goods owned by the business outside the business, agree, for a consideration, to refrain from doing something, agree to grant, assign or surrender a right for a consideration, you must account for VAT on all the taxable supplies you make by way of business, and you can treat as input tax VAT charged on goods and services which you get for your business (see, if you also carry out non-business activities, it could affect the amount of VAT you can treat as input tax - VAT charged on goods and services which you do not get for your business is not input tax and you cannot reclaim it, the way in which self-employed people carrying on any trade, vocation or profession, as well as companies, earn an income, the provision of membership benefits by clubs, associations and similar bodies in return for a subscription or other consideration, the activities of clubs and other recreational bodies, some of the activities of charities and non-profit making bodies, maintaining museums, parks or historic sites (unless there’s an admission or other charge), accommodation in hotels and similar establishments in the Isle of Man, including the provision of holiday accommodation and the letting of camping sites, where the VAT rate is 5%, repairs and refurbishments to domestic property situated in the Isle of Man, where the VAT rate is 5%, register for VAT in every EU member state where VAT is due and submit VAT Returns and payments in each of those states, check whether you should register for the Union or Non-Union, Great Britain (England, Scotland and Wales) from anywhere outside the UK, Northern Ireland from outside the UK and EU, receive any service - the place of supply of which is the UK (other than, whether the proposed rate or method is determined by reference to the UK currency market, the frequency with which it’s proposed to update it (forward rates or methods deriving from forward rates are not acceptable), Margin Scheme on second-hand cars and other vehicles, supply them for genuine business purposes as an illustrative or typical example of your product, neither you, nor the intermediary charge for them, you supply them for genuine business purposes and they’re to be given as an illustrative or typical example of your product, the samples remain your property until they’re given to the final customer, any samples which are not used are returned to you or destroyed, perform some other action of benefit to you, are a motor manufacturer, vehicle converter or vehicle dealer and use a motor car in your business (see, put a car on which you claimed input tax (because it was to be used as a taxi, for self-drive hire or giving driving instruction) to some other use, use your own labour to construct a building (other than dwellings or certain other residential buildings) or to increase the floor area of an existing building by 10% or more (see, use outside the business by anyone else, such as an employee, a relative or a friend, you use goods owned by your business for private purposes, you give or lend someone an item from your business, your employees use goods that are assets of your business, at weekends or for holidays, building construction and refurbishment, particularly to domestic premises, which are carried out for the purpose of business but whose use changes over time, goods and services supplied to you in the UK, goods you acquire into Northern Ireland from a taxable person in an EU member state (see, any services supplied in the UK which you receive from abroad, overheads and research and development costs, supplies you make which are liable at the standard rate, reduced rate or the zero rate (see, supplies you make which are outside the scope of UK VAT but which would be taxable supplies if they were made in the UK, supplies of services you make to a person who belongs outside the UK, or supplies of services you make which are directly linked to the export of goods to a place outside the UK - and the making of arrangements for such supplies, provided the supply would have been exempt by virtue of any item of Group 2, or any of items 1 to 8 of Group 5, of, on goods and services not used for your business (see, on a car, including fitted accessories and delivery charges (see, if you’re a developer, on certain articles that are installed in buildings that you sell or lease at the zero rate (see, on purchases that fall within the tour operators margin scheme (see, on goods sold to you under one of the VAT second-hand schemes (see, on assets of a business transferred to you as a going concern (see, the goods were supplied not more than 4 years before the business was registered or was required to be registered, the goods were supplied to the person who is now registered for VAT, the goods were obtained for the business which is now covered by the VAT registration and related to its taxable activities - if the services related partly to taxable activities and partly to other activities, you must work out what proportion of the use of the services related to the taxable activities, you still hold the goods or they have been used to make other goods which you still hold, you compile a stock account of the goods - this must show the quantities of goods and the dates when you obtained them, and if you used any goods to make other goods, or disposed of them after you were registered for VAT, the account must give details, with dates, the services were supplied not more than 6 months before the business was registered or was required to be registered, the services were supplied to the person who is now registered for VAT, the services were received for the purposes of the business which is now covered by the VAT registration and related to its taxable activities - if the services related partly to taxable activities and partly to other activities, you must work out what proportion of the use of the services related to the taxable activities, the services were not related to goods which you disposed of before you were registered (such as repairs to a machine which was sold before registration), you compile an account of these services, this must describe the services and the dates when you received them and, if the services related to goods which you disposed of after you were registered for VAT, the account must give details, with dates, goods or services were obtained or imported by a person who became a member, officer or employee of the body, person was not a taxable person at the time of the supply or importation, computers and items of computer equipment with a VAT exclusive cost of £50,000 or more, land, buildings, civil engineering works and refurbishments with a VAT exclusive cost of £250,000 or more, alterations, extensions and annexes to buildings and engineering works with a VAT exclusive cost of £250,000 or more, ships, boats and other vessels, and aircraft with a VAT exclusive cost of £50,000 or more, a motor car can only be decided once you use the vehicle in your business (for example, as a demonstration model) - the tax point is then the date when, by any positive and recorded action, you transferred the car from the new car sales stock, construction services is when the service is performed (see, the issue of a VAT invoice (where the supply is standard-rated), receipt of all or part of the purchase price before the date of legal completion - but see, for a single supply of services it’s the date the service is completed, or when it’s paid for, if this is earlier, for continuous supplies it’s the end of each periodic payment or billing period, or the date of payment where this is made earlier than the end of the period to which it relates, for continuous supplies that are not subject to payment or billing periods and for which no payment is made beforehand, it’s the end of each calendar year, the general VAT rules that apply to invoicing, the information that a VAT invoice must show, your customer operates self-billing arrangements (see, you make a gift of goods on which VAT is due (see, you’re awaiting VAT invoices from your own suppliers or sub-contractors, an extension of the 14 day limit has already been approved, special accounting arrangements have been approved, where you’re newly registered but have not been notified of your VAT registration number - in this case you must issue the VAT invoice within 30 days from the date of advice of the VAT registration number, a sequential number based on one or more series which uniquely identifies the document, the date of issue of the document (where different to the time of supply), your name, address and VAT registration number - you may issue invoices under a trading name, but you must show the name and address under which you’re registered for VAT somewhere on the document, the name and address of the person to whom the goods or services have been supplied (your customer), a description sufficient to identify the goods or services supplied, for each description, the quantity of the goods or the extent of the services, the rate of VAT, and the amount payable excluding VAT - this can be expressed in any currency, the gross total amount payable, excluding VAT - this can be expressed in any currency, the total amount of VAT chargeable - this must be expressed in sterling, normally provided in a particular business sector, the value of the supply you are making is £250 or less, your name, address and VAT registration number, a description which identifies the goods or services supplied, for each applicable VAT rate, the total amount payable, including VAT, and the VAT rate, £250 or less but the customer requests one, a description of the goods or services supplied, there’s actually been a supply of goods or services, it’s taxable at the standard rate or reduced rate of VAT, the supplier is a taxable person, that’s someone either registered for VAT in the UK, or required to be registered, the supply is made to the person claiming the input tax, the recipient is a taxable person at the time the VAT was incurred, the recipient intends to use the goods or services for business purposes, bank statements clearly showing payment of the supply to the supplier, evidence of how you identified your supplier and your negotiations with them, documents evidencing the transportation, storage or insurance of the goods, any other documents that show a supply took place between you and your supplier, you use a product coding system which clearly identifies the different classes of goods sold - the system should be based on at least 2 digits, possibly 3 if you sell a wide range of products, you must prepare and maintain product code lists and provide all your VAT-registered customers with up to date copies of the lists, you must make sure that the till roll includes all the details required for a full VAT invoice (see, you must keep a copy of till rolls and product code lists for 6 years (unless HMRC has agreed that you need only keep them for a shorter period), are authenticated - that is, signed by the supplier and no normal VAT invoice or self-billed document is issued for the supplies, down to the nearest 0.1p - for example, 86.76p would be rounded down to 86.7p, to the nearest 1p or 0.5p - for example, 86.76p would be rounded up to 87p, 4 digits after the decimal point and then round to 3 digits - for example, if the VAT is £0.0024, it should be rounded to £0.002 (0.2p), the nearest 1p or 0.5p - if you decide to do this, you must not round the VAT down to ‘nil’ on any unit or article that is liable at the standard or reduced rate, for example, if the VAT is £0.0024 it should be rounded to £0.005 (0.5p), the transmission of a structured electronic invoice, for example XML format, through an Electronic Data Interchange service (, deal with goods which are sold to satisfy a debt, wish to claim relief from VAT on a bad debt, the discount terms (which must include, but need not be limited to, the time by which the discounted price must be paid), a statement that the customer can only recover as input tax the VAT paid to the supplier, reflect a genuine mistake or overcharge or an agreed reduction in the value of the supply, and be issued within 14 days of the refund payment being made to the customer, give value to the customer, that is, represent a genuine entitlement (or claim) on the part of the customer for the amount overcharged either to be refunded or offset against the value of future supplies, the name, address and registration number of the supplier, a description which identifies the goods or services for which credit is being claimed or allowed, the quantity and amount for each description, the rate and amount of VAT credited (expressed in sterling), the number and date of the original VAT invoice or invoices relating to the supply - if you cannot do this (for example, because returned goods cannot be identified with a particular invoice), you must be able to satisfy HMRC by other means that you accounted for VAT on the original supply, reflect a genuine mistake or undercharge or an agreed increase in the value of the supply, and be issued within 14 days of the increase being agreed between the supplier and the customer.