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HMRC internal manual

VAT Small and Medium Enterprises Assurance Manual

Supplementary or alternative checks: scrutiny of output invoices

Sales invoices should be scrutinised to check that:

  • they are issued in numerical sequence or there is a valid reason for not doing so;
  • they are entered in the records according to the date of the invoice;
  • they contain the information required to be shown on VAT invoices as specified in Notice 700 paragraph 6.2;
  • tax is being calculated and charged at the proper rate and on the proper value;
  • the proper tax point is being used (VATTOS - Time of supply); and
  • the requirements regarding rounding up or down, discounts and delivery charges are being observed.

When several copies of sales invoices are prepared the officer should ascertain the reasons for each copy, and confirm that all copies are clearly distinguishable from the original tax invoices.

If there are omissions in the sequence of invoices issued, the trader should be asked to account for the missing numbers. Where invoices are cancelled or spoiled, the original and all copies should be retained.

When several series are in use concurrently, the method of control of issue should be established.

The officer should also enquire whether any of the trader’s supplies are subject to self- billing arrangements. If so, it should be established that the output tax on the invoices received from the customers concerned is being properly brought to account (V1-24A Trader’s records).

The officer should be particularly observant for invoice, delivery or receipt books lying on desks, shelves, or elsewhere, which appear to be additional to those in use.

All relevant details should be recorded.