If services are supplied to a customer on a continuous basis and payments are received at regular intervals or by instalments (such as standing orders or direct debits) a VAT tax point is created on the earliest occurence of the following, when you:

  • issue a VAT invoice; or
  • receive a payment.

When payments are due to be made at regular intervals you can issue a VAT invoice at the start of any period of up to one year (provided that more than one payment is due in the period) to cover all the payments due in that period.

For each payment you should set out the:

  • VAT-exclusive amount;
  • date on which the payment is due;
  • rate of VAT; and
  • VAT payable.

If you decide to do this, you do not have to account for tax on any payment until:

  • the date on which it is due; or
  • the date you receive it, whichever happens first.

Your customer must not reclaim, as input tax, any VAT shown on the VAT invoice until:

  • the date on which the payment is due; or
  • you have received the payment, whichever happens first.

The same procedures apply to continuous supplies of goods, in the form of water, gas and electricity.


HMRC VAT 14.3 Continuous supplies of goods and services


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