Focus on the commercial: what a VAT invoice must indicate

If you sell goods and/or services to another business and you are both VAT registered, you will usually need to send them a VAT invoice and keep the appropriate records. There are certain details a VAT invoice must show by law, and our template contains all the legally required information. You can also purchase this template as part of the Starting an Online Business Toolkit and/or Debt Collection Toolkit.

What a VAT invoice should show depends on who you are selling to and what type of sale you are making. For example, you can provide a simplified VAT invoice if you have UK retail sales of £250 (including VAT) or less. You may also be able to issue simplified invoices in other circumstances; If you are unsure of the types of VAT invoices you should issue, talk to your accountant.

Keep in mind that VAT invoices must generally be issued within 30 days of the date you supply the goods or services or, if paid in advance, within 30 days of the date of payment .

You will not need to issue a VAT invoice in certain circumstances; check out our recent blog for more information on when you don’t need to send a VAT invoice.

This blog sets out typical invoicing requirements for UK sales requiring full VAT invoices, requirements for simplified VAT invoices for retail sales of £250 or less and requirements for VAT free invoices .

What a VAT invoice should show

UK sales requiring full VAT invoices

If you are required to produce a full VAT invoice (for most sales over £250 including VAT) you will normally need to ensure that it contains the following information:

  1. a unique invoice number that follows the last invoice you sent (using sequential numbering);
  2. your business name, address and VAT registration number;
  3. the date of the invoice;
  4. the name and address of the customer you are billing;
  5. a clear description of the goods or services provided, including the quantity of goods or scope of services;
  6. when the goods have been sent, collected or made available or the services have been performed;
  7. the rate of any cash discount;
  8. the applicable VAT rate(s). If certain goods or services are exempt from VAT or zero-rated, it should be specified that no VAT is invoiced for these goods or services;
  9. the total amount excluding VAT;
  10. the total amount of VAT (this must be expressed in pounds sterling); and
  11. the total price to be paid, including VAT.

UK retail customers making purchases of £250 (including VAT) or less

In these circumstances, you can provide a simplified VAT invoice, which means you only need to include the following information:

  1. your business name, address and VAT registration number;
  2. a clear description of the goods or services supplied (the invoice must not contain any reference to goods or services exempt from VAT);
  3. when the goods have been sent, collected or made available or the services have been performed;
  4. the applicable VAT rate(s);
  5. if several VAT rates are applicable, the total amount to be paid including tax for each rate; and
  6. the total price including VAT.

Content of invoices excluding VAT

VAT-free invoices should contain sufficient information to secure payment from the customer and serve as a record of the transaction. As such, you should ensure that the following information is included:

  1. a title indicating that it is an invoice (rather than, for example, a receipt);
  2. if your business is a registered company, its full legal name, number and registered office;
  3. your contact details;
  4. the name and address of the customer;
  5. the date of the invoice;
  6. a unique identification number (so that this invoice is not confused with another);
  7. a detailed breakdown of what you charge and the delivery date;
  8. the price of each item in the breakdown;
  9. the total price ; and
  10. date of payment and full details of acceptable methods of payment.

See Invoice without VAT for a template you can use.

Filing of VAT declarations

If you are required to register for VAT, you will need to submit VAT returns showing the amount of VAT you owe to HMRC every three months. Check out this blog on when and how to register for VAT.

From 1 April 2022, all VAT registered entities are required to keep digital records and submit VAT returns to HRMC using compatible software.

The content of this article is current as of the date of publication. The information provided is for informational purposes only and is not intended to provide legal advice. ©Sparqa Limited 2022. All rights reserved.

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