Introduction to VAT

VAT glossary

These are some plain English definitions of common VAT terms that HM Revenue & Customs (HMRC) uses:

  • accounting period: see tax period
  • acquisitions: goods brought into the UK from other EU countries - (goods brought into the UK from outside of the EU are known as Imports)
  • corporate body: an incorporated body such as a limited company, limited liability partnership, friendly, industrial or provident society
  • distance sales: where a business in one EU country sells and ships goods directly to consumers in another EU country, eg internet or mail-order sales
  • exports: goods sent to a non-EU country
  • despatches: goods sent to another EU country
  • imports: goods brought into the EU from another country
  • input tax: the VAT you pay on your purchases
  • output tax: the VAT you charge on your sales
  • place of supply: the country in which a supply of goods or services must be accounted for VAT purposes
  • self-billing: your customer issues your VAT invoice and sends a copy to you with their payment
  • supply: selling or otherwise providing goods or services, including barter and some free provision
  • supply of goods: when exclusive ownership of goods passes from one person to another
  • taxable person: any business entity that buys or sells goods or services and is required to be registered for VAT - this includes individuals, partnerships, companies, clubs, associations and charities
  • taxable supplies: all goods and services sold or otherwise supplied by a taxable person which are liable to VAT at the standard, reduced or zero rate
  • taxable turnover: the total value - excluding VAT - of the taxable supplies you make in the UK (excludes capital items like buildings, equipment, vehicles or exempt supplies)
  • tax period: the period of time covered by your VAT return, usually quarterly
  • tax point: the date when VAT has to be accounted for - for goods, this is usually when you send the goods to a customer or when they take them away, for services, this is usually when the service is performed
  • time of supply: see tax point

Subjects covered in this guide

Developed with:
HM Revenue & Customs


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