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
