On 19 March 2019, HMRC published a draft statutory instrument – The Value Added Tax (Amendment) Regulations 2019 – which will amend the rules governing when VAT adjustments may be made following a change to the price of goods and services.

Regulation 38 of the Value Added Tax Regulations (SI 1995/2518) (the VAT regulations) will be amended to provide that a VAT adjustment may only be made following an increase or decrease in consideration for a supply if the supplier provides a debit or credit note containing the information specified in new regulation 15C.

New regulations 24A to 24C will be inserted into the VAT regulations to specify the circumstances in which an increase or decrease in consideration occurs and when it is treated as occurring. Any increase or decrease must be accompanied by a payment or a liability to make a payment.

HMRC is currently consulting on the draft statutory instrument which is due to come into effect on 1 September 2019.

A copy of the statutory instrument can be viewed here