This is not a VAT invoice

This is not a VAT invoice

Didn't find your answer?

A supplier has provided an invoice showing their VAT reg'n no. (yes - they managed to get one!) and VAT. However, at the top of the invoice they have written "This is not a Tax invoice for VAT Purposes". The VAT helpline have told us this is not right and interestingly automatically assumed it was in connection with the delays in registration! However, this supplier has been VAT reg'd for years. I remember talking to a VAT inspector years ago about this but can't remember what they said.

Has anyone any ideas?

Ta
Nathan Hamill

Replies (9)

Please login or register to join the discussion.

avatar
By theaardvark
18th Jul 2007 16:41

Applications and accruals....
Nathan,

Where a supplier provides a continuous supply of services, such as book keeping or construction services, the tax point is the earlier of the date of payment or the issue of an invoice. The service provider can, therefore, legitimately delay accounting for VAT by not issuing a VAT invoice until payment is made. However, he/she still need to notify the client that payment is due, hence the "application for payment" (you have to call it something if you're not calling it an "invoice").

Applications for payment are also commonly issued to customers who self bill. Under the self billing agreement the supplier agrees not to issue a sale invoice but still needs to issue some documentation prompting the customer to pay.

Other firms simply wish to withhold the VAT invoice, and therefore the entitlement to deduct input VAT, as an incentive for payment and therefore issue these "not VAT invoices".

Regards,

Paul Taylor
Senior VAT Consultant
Dains

Thanks (0)
By keycard
17th Jul 2007 10:22

is it an application for payment
Application for payment ?

Thanks (0)
avatar
By shaunmcguinness
17th Jul 2007 11:43

not a vat invoice
its usually to do with cashflow. if the supplier is using the accruals scheme for VAT they dont need to pay over the VAT until you pay them and they then raise a sales invoice. Lots of accountancy firms do this and call them "fee notes"
theres nothing sinister - you just cannot reclaim the VAT until you receive the VAT invoice which normally follows payment

Thanks (0)
avatar
By nathanhamill
17th Jul 2007 13:10

Application...?
David

Aren't all invoices an application for payment?

Thanks (0)
avatar
By nathanhamill
17th Jul 2007 13:13

But Shaun...
with the excpetion of cash accounting for VAT the whole VAT system revolves around the VAT tax date being the same for the supplier & customer.

Thanks (0)
avatar
By shaunmcguinness
17th Jul 2007 14:59

point of sale
Nathan
you are 100% correct but this is the procedure lots of firms use as the fee note is not a valid invoice but just a request for payment. I don't earn enough to be outside the cash accounting threshold!

Thanks (0)
avatar
By saf94
26th Feb 2016 07:59


hello guys,

are request for payment/application for payment documents allowed ? (by tax authorities,regulatory bodies)

Since you it may be seen as a tactic to pay VAT on a later date.

Thanks (0)
avatar
By TC2
12th Nov 2017 19:02

Meanwhile, 10 years later, I've just read these replies and I don't think they can possibly be right. If it were legal to delay the tax point until payment was received, then no-one would have to do "Accruals" accounting. VAT guidance says:
Tax point if VAT invoice issued 15 days or more after the DATE OF SUPPLY.
So you can reclaim VAT 16 days after the work was completed. If you never pay and hence never receive a legal VAT invoice - well, it was illegal claiming the VAT anyway! btw I wouldn't like to do business with any business who used this form of (not very legal) blackmail to make you pay.

Thanks (0)
Replying to TC2:
By Ruddles
12th Nov 2017 19:21

Did you bother to read the first response properly?

Thanks (0)