Changes to Time of Supply Rules

Author: Robert Killington

Author: Robert Killington

The rule changestaking place in2010 cover not only the place of supply, but also the time of supply. It means that the time at which VAT must be accounted for under the reverse charge changed on 1 January 2010. The changes will be introduced by secondary legislation later in the year. This is being done to harmonise the time of supply rules for reverse charge services throughout the EU in other words, to make rules applied to cross-border supplies of services by different Member States more consistent. HMRC has made the following Place of Supply/Time of Supply guidance available on its website. Part 4 of the document answers several important (and probably frequently asked) questions regarding the forthcoming time of supply rule changes. The time of supply changes came into effect at the same time as other VAT Package changes on 1 January 2010, though some legislation is still in draft and consultations with business groups have been taking place to minimise additional burden on businesses that the new rules may involve. It is expected that the legislation will all be in place before Parliament rises for the Christmas recess. The guidance explains in detail how the new rules will apply to single supplies of services and continuous supplies of services and how to define tax points in both cases. For example, with a single supply the tax point will be completion of the service, and for continuous supplies there will be a tax point at the end of each billing or payment period. The difference between single and continuous supplies of services is explained in detail. Other answered questions include: What supplies are affected? Why do the new rules cover all supplies subject to the reverse charge arrangements in the UK? How will I treat supplies that span 1 January 2010? What impact will these rules have on completion of UK EC Sales Lists? and a few more. Iwill be writing more articles on these topics over the coming weeks and months. For now,I recommend that you read the guidance available from HMRC. About the Author:

VATark is the trading style of Robert Killington.

I started working in indirect taxation over 30 years ago. I worked for Customs & Excise (now H M Revenue & Customs (HMRC)) for 13 years covering many aspects of the departments work. In 1988 I left Customs & Excise to work for a firm of Chartered Accountants. I left the last firm I worked for in 2000 to set up my practice, with the objective of providing sound, pragmatic advice to businesses, charities, and other organisations affected by VAT.

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