A VAT invoice is an invoice that contains information required by the VAT regulations. A VAT invoice can only be issued by a business which is registered for VAT. Where a business is VAT registered, they must issue a VAT invoice whenever they supply goods or services that are liable to the standard rate of VAT or a reduced rate to another taxable person. A VAT invoice must normally be issued within 30 days of the date on which the supply was made.

VAT invoices are important and the business must keep a copy of every VAT invoice that they issue. Likewise, they must keep a copy of every VAT invoice that they receive. VAT invoices are the primary evidence of VAT charged and VAT incurred.

Details that must be included

Every VAT invoice issued must include the following information:

· a sequential number based on one or more series that uniquely identifies the document;

· the time of supply;

· the date of issue of the document (where this is different from the time of supply);

· the name, address and VAT registration number of the supplier;

· the name and address of the person to whom the goods or services are supplied;

· a description sufficient to identify the goods or services supplied;

· for each description, the quantity of the goods or the extent of the services, and the rate of VAT and the amount payable, excluding VAT, expressed in any currency;

· the gross total amount payable, excluding VAT, expressed in any currency;

· the rate of any cash discount offered;

· the total amount of VAT chargeable, expressed in sterling; and

· the unit price.

It should be noted that different rules apply where a margin scheme is used and the business should follow the rules of the scheme.

Where a business based in Northern Ireland sends an invoice to a person in an EU member state, the VAT invoice must also include the letters ‘GB’ in front of the VAT registration number for cross-border supplies, the registration number of the recipient preceded by the alphabetical code for the relevant EU member state and a reference to the means of transport.

Electronic invoices

VAT invoices may be issued electronically, and electronic invoices offer a number of advantages over paper invoices. Electronic invoicing is the transmission and storage of invoices in an electronic format without duplicate paper invoices.

The information set out above in relation to paper invoices must also be contained in electronic invoices. However, when sending batches of invoices to the same customer, information that is common to the individual batches may be recorded once per batch rather than on each invoice. For example, the customer’s full name could be included on the batch header rather than on each individual invoice.

Retail invoices

There is no requirement to issue a VAT invoice for retail supplies to unregistered businesses. If asked for a VAT invoice and the supply is £250 or less, a simplified VAT invoice can be issued. However, if the supply is more than £250, a full VAT invoice must be provided if requested.

Simplified invoice

A simplified invoice can be issued if the supply is £250 or less showing the supplier’s name, address and VAT registration number, the time of supply, a description of the goods or services and the VAT rate charged for each, the total amount payable including the VAT shown in sterling and the VAT rate charged. Exempt supplies should not be included in a simplified invoice.

Where the value of the supply is more than £250, a full VAT invoice must be issued.

Credit notes

Where a credit note is issued, it must include the same information as the original invoice and sufficient information to identify the original invoice.

Currency

Although the invoice amounts may be expressed in any currency, where there is a positive rate of VAT due in the UK, the total amount of VAT must be expressed in sterling.