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HMRC internal manual

VAT Traders’ Records Manual

VAT invoice: Unsatisfactory VAT invoices

You should make every effort to ensure that traders comply with the regulations governing VAT invoices. If you find that registered traders are issuing incorrectly prepared VAT invoices you should remind them, in writing, of their obligations under the regulations and the difficulties that incorrect invoices may cause for their customers.

If a trader continues to default, you should send a further letter, drawing attention to the trader’s legal obligations and warning them that continuing irregularities may result in a civil penalty being imposed under the VAT Act 1994, section 69 for a breach of regulatory provisions. Guidance on the issue of a penalty is in VAT Civil Penalties Manual.

In line with our policy stated during the consultation with UK business prior to introducing the regulatory changes, following the changes to the VAT invoicing regulations inserted by SI2085/2007 with effect from 1 October 2007, HMRC has adopted a ‘light touch’ approach for a twelve month transitional period.

Regulatory penalties under s.69 of the Value Added Tax Act 1994 should only be assessed in that period in cases of abusive and repeated or fraudulent non-compliance. Any regulatory penalty will apply to the general failure and will not attach to each invoice issued.