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VAT: DIY billing!

Shared from Tax Insider: VAT: DIY billing!
By Andrew Needham, April 2024

Andrew Needham looks at the workings of the self-billing system and how it can be helpful for businesses. 

Usually, it's the supplier who issues a VAT invoice; but in some circumstances, the customer prepares the invoice instead and gives the supplier a copy. This system is called 'self-billing'.  Any business can use this procedure, so long as certain conditions are met.   

Self-billing is an agreement between businesses, which is most commonly found in the building and haulage industries where large businesses often have many smaller sub-contractors. 

How do I start using self-billing? 

There is no requirement to obtain HMRC’s prior approval before starting to operate self-billing. Any business can use self-billing provided the arrangements meet the legal conditions laid down in SI 1995/2518, reg 13(3) and in VAT Notice 700/62

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