What must a VAT invoice show?
If you are VAT-registered, you must issue a VAT invoice whenever you supply standard or reduced rate goods or services to another VAT-registered person, normally within 30 days of the supply. It has a set list of details, and a shorter version is allowed for small amounts.
When you must issue one
Only VAT-registered businesses can issue VAT invoices. HMRC says that if you are registered, you must issue one whenever you supply standard rate or reduced rate goods or services to another VAT-registered person, and normally within 30 days of the date you make the supply. You must keep a copy of every VAT invoice you issue, and generally keep VAT business records for at least 6 years.
You do not always have to issue one to a VAT-registered customer. HMRC lists some cases, for example where your invoice would cover only exempt or zero-rated sales within the UK. HMRC's rule is about supplies to VAT-registered customers. For a homeowner, a clear invoice showing the VAT separately is still the right way to bill them.
What a full VAT invoice must show
- a sequential number that identifies the invoice, based on one or more series
- the time of supply (the tax point), and the date of issue if that is different
- your name, address and VAT registration number
- the name and address of the customer
- a description that identifies the goods or services
- for each description, the quantity or extent, the VAT rate, and the amount payable excluding VAT
- the unit price
- the total amount payable excluding VAT
- the rate of any cash discount offered
- the total VAT chargeable, in sterling
Most normal commercial invoices already carry this. The test is to check yours against the list, including the VAT number and the supply date, which are easy to leave off.
The simplified invoice for £250 or less
If you are not a retailer and the total value of the supply is £250 or less including VAT, HMRC lets you issue a simplified invoice. It must show:
- your name, address and VAT registration number
- the time of supply (tax point)
- a description that identifies the goods or services
- for each VAT rate, the total amount payable including VAT, and the rate charged
Exempt supplies must not go on this type of invoice. If the total is more than £250 and the customer asks for a VAT invoice, you must issue a full one, or a modified one that shows VAT-inclusive values.
Reverse charge invoices
Where the domestic reverse charge applies to building work, the invoice still carries everything a VAT invoice needs. It must also make clear that the reverse charge applies and that the customer has to account for the VAT, and it must show the VAT due under the reverse charge, or the VAT rate if the amount cannot be shown. That VAT must not be added to the amount you charge. HMRC says the reference "reverse charge" is required, and gives wording such as "Customer to pay the VAT to HMRC". Our guide on when the VAT domestic reverse charge applies to building work covers when to use it.
If you are not VAT-registered
You must register for VAT before you can charge it, so a non-VAT invoice carries no VAT, and you will have no VAT number to show. GOV.UK says any invoice should give:
- a unique identification number
- your name, address and contact details, and the customer name and address
- a clear description of what you are charging for
- the date the work or goods were supplied, and the date of the invoice
- the amount charged and the total owed
A sole trader must also give their own name and any business name used, and an address where legal documents can be delivered if they trade under a business name. A limited company must give its full name exactly as on the certificate of incorporation.