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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:

  • Unique invoice number that follows on from the last invoice
  • Your business name and address
  • Your VAT number
  • Date of issue of the invoice
  • The tax point (or ‘time of supply’) if this is different from the invoice date
  • Customer’s name or trading name, and address
  • Description of 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
  • Total amount excluding VAT
  • Total amount of VAT chargeable, expressed in sterling pound
  • Price per item, excluding VAT
  • Rate of any discount offeredIf an item is exempt or zero-rated make clear no VAT on these items and if items are charged at different VAT rates, then show the applicable VAT rate for each item

Foreign currency

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.

Amending a VAT invoice

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.

Company Law

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).

Miscellaneous issues

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.

VAT 1

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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