The tax point (or ‘time of supply’) for a transaction is the date the transaction takes place for VAT purposes.
The basic tax point for goods is the date when the goods are removed (to give effect to the transaction) or, if they are not removed (for example machinery built on site), it is the date when they are made available to the recipient. The basic tax point for services is the date when the service is performed.
You need to know this because, for example:
- it’s included on VAT invoices
- it tells you which VAT period the transaction belongs to
- it tells you which VAT Return to put the transaction on
The tax point can vary, but is usually the following.
| Situation | Tax point |
|---|---|
| No invoice needed | Date of supply |
| VAT invoice issued | Date of invoice |
| VAT invoice issued 15 days or more after the date of supply | Date the supply took place |
| Payment or invoice issued in advance of supply | Date of payment or invoice (whichever is earlier) |
| Payment in advance of supply and no VAT invoice yet issued | Date payment received |