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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: business records checks: at the visit: VAT registered business: retailers

As stated in COG941020 a VAT registered business must issue VAT invoices to its customers. However, there is a concession for retailers who often sell a large number of small value items.

A retailer is not required to issue a VAT invoice unless requested to do so by a customer who is registered for VAT.

If a retailer is asked to issue an invoice to a VAT registered customer and the value of the supply is less than £250 it need only contain the following particulars:

  • the name, address and VAT registration number of the retailer
  • the date the goods were supplied (the time of supply)
  • a description sufficient to identify the goods or services provided
  • the total amount payable including VAT
  • if different rates of VAT are payable, for each rate of VAT chargeable, the gross amount payable including VAT and the rate of VAT applicable.

Retailers who do not issue invoices will use a VAT retail scheme to calculate the VAT payable for each period. For customers using this methodology they must keep a record of daily gross takings.

A gross taking is a record of all amounts received from customers, including VAT, at the time the sale is made. The record must include amounts received in cash or by some other method (for example, credit card, debit card, cheque). The record must also include any adjustments that may have been made.

HMRC cannot state in what form records must be kept. However if a till is used, the easiest way for a business to comply with this requirement is to keep a copy of the till roll. If the business is unable to do this it must keep some other record of every sale, for example by printing a copy of every receipt and keeping it, or by keeping a manual record of every sale.

A business should be aware that the Z reading (Tills and Till Roll Examination) on its own is not sufficient to meet their obligation. There must be a record of every sale.