VAT Glossary

These are some plain English definitions of common VAT terms that 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 personl 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