VAT Invoices – The Essentials

All VAT registered businesses have to issue VAT invoices to go with the sale of their goods and services. Sounds fairly straightforward but if you look into the rules regarding VAT invoices then you will see that they are quite significant and care has to be taken to ensure that they are fully complied with.

1. Introduction

A VAT invoice shows certain VAT details of a sale or other supply of goods and services. It can be either in paper or electronic form.

A VAT-registered customer must have a valid VAT invoice from the supplier in order to claim back the VAT they have paid on the purchase for their business.

The following are not VAT invoices:

  • pro-forma invoices;
  • invoices that state ‘this is not a tax invoice';
  • statements;
  • delivery notes;
  • orders; and
  • letters, emails or other correspondence.

A business cannot reclaim the VAT paid on a purchase by using these documents as

proof of payment.

2. What a VAT invoice must show

A VAT invoice must show:

  • an invoice number which is unique and sequential;
  • the seller’s name or trading name, and address;
  • the seller’s VAT registration number;
  • the invoice date;
  • the time of supply (also known as tax point) if this is different from the invoice
  • date – see below;
  • the customer’s name or trading name, and address;
  • a description sufficient to identify the goods or services supplied to the
  • customer;
  • the rate of any cash discount; and
  • the total amount of VAT charged expressed in sterling.

For each different type of item listed on the invoice:

  • the unit price or rate, excluding VAT;
  • the quantity of goods or the extent of the services;
  • the rate of VAT that applies to what’s being sold; and
  • the total amount payable, excluding VAT.

If a VAT invoice is issued that includes zero-rated or exempt goods or services, it


  • show clearly that there is no VAT payable on those goods or services; and

show the total of those values separately.

So, the humble VAT invoice is actually more complicated than you might think and it is important to ensure that HMRC rules and regulations are complied with. If in doubt about the content of your VAT invoices then you should contact us, Balance Accountants, Huddersfield, for guidance. Better to get it right than end up with HMRC on your back.

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