All VAT registered businesses are required to produce invoices which comply with VAT legislation.
Whether VAT is chargeable can be a complex question and advice should be sought.
Although there are three types of VAT invoices, a “Full Invoice” is used for most transactions. For advice on whether a modified (used for retail supplies over £250) or simplified (used for supplies under £250) might suit, please get in touch.
Invoices must include:
For UK VAT invoices in a foreign currency, the VAT invoices must show the total VAT payable in sterling on the VAT invoice if the supply takes place in the UK. You can use the UK market selling rate at time of supply or use the HMRC published periodic exchange rates for converting the currency to pound sterling. Any alternative exchange rates will need to be agreed in writing with HMRC.
If you realise an invoice has been issued with an error or the incorrect VAT rate, simply issue a credit note for the erroneous invoice and issue a corrected version of the invoice referencing the original invoice number.
In addition to the above items, UK registered companies are required to include on all communications, including invoices, the company number, registered office address and place of incorporation (normally England & Wales).
If VAT is not chargeable on a particular supply (because it is outside the scope, or subject to reverse charge, for example) the reason why VAT is not due must be shown on the invoice.
Copies of any cancelled invoices should be kept, and an explanation recorded as HMRC have a right to enquire about gaps in invoice sequencing.
If you are in Northern Ireland and trade in goods with businesses in other EU Member States, then you must show your EU customer’s VAT number on the invoice, including the alphabetical code of the relevant EU member state. This information is required by both the issuing business and recipient business for separate reporting purposes. Most accounting software collates this information.
Disclaimer: This note does not contain a full statement of the law and it does not constitute legal advice. Please contact us if you have any questions about the information set out above.
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