Rules for issuing VAT Invoices

General

Many businesses are registering for VAT, either because:

  • They have to; or
  • They want to because they can reclaim VAT on purchases; or
  • They can profit from the Flat Rate Scheme

If you are registered then, unless you are in the retail trade, you must issue a VAT invoice for all sales. If you are in retail then you must issue a VAT invoice if requested. A VAT invoice must, by law, include the following information:

  • An invoice number which is unique and follows on from the number of the previous invoice. You must keep any spoilt or cancelled invoice as evidence of cancellation. This requirement was recently introduced and is the only requirement in UK law for an invoice to be numbered. However, it is good practice in all cases.
  • The seller’s name or trading name, and address**
  • The seller’s VAT number**
  • The invoice date which is the date that the invoice was raised
  • If different from above, the tax point of the supply which is the date of the supply. If the invoice was raised within 3 days of the date of supply then the invoice date can be regarded as the tax point**
  • The customer’s name or trading name, and address
  • A description sufficient to identify the goods or services supplied**
  • The rate of any cash discount
  • The total amount of VAT charged

For each different type of item listed on the invoice the following must be shown:

  • The unit price excluding VAT
  • The quantity of goods or the extent of services
  • The rate of VAT applied
  • The total payable excluding VAT

If the invoice includes zero-rated or exempt goods the the invoice must show:

  • The fact that no VAT is payable on those goods or services
  • The value of those goods or services separately from the rest

If you in the retail trade and the value of the sale is £250 or less, including VAT, and you are asked for a VAT invoice you can issue a simplified invoice which shos the following:

  • The four items marked ** above
  • The total amount including VAT payable at each VAT rate and the VAT rate charged

You must issue a VAT invoice within 30 days of making the supply, or the date of receipt of payment if earlier.