Value Added Tax Act 1994 section 29

Invoices provided by recipients of goods or services

Section 29 deals with self-billing arrangements where the recipient of goods or services issues the VAT invoice and understates the VAT due, allowing HMRC to shift liability for the understated amount from the supplier to the recipient.

• Where a taxable person (the recipient) creates a self-billing invoice for a taxable supply of goods or services made to them by another taxable person, and that invoice understates the VAT chargeable on the supply, HMRC may intervene.
• HMRC may serve a notice on both the recipient and the supplier, electing that the understated VAT becomes the liability of the recipient rather than the supplier.
• This election applies for all purposes, meaning the supplier is fully relieved of responsibility for the understated amount once the notice is served.
• The provision ensures that where a recipient controls the invoicing process and gets the VAT figure wrong, the recipient bears the consequences rather than the supplier who had no hand in preparing the invoice.