VATREC7020 - Computer invoicing: Legal Framework

The VAT Act 1994, schedule 11, paragraph 3(1),(2),(3) has the effect of regulating VAT invoices issued on computer media. It says:

3 (1) Regulations may prescribe, or provide for the Commissioners to impose in a particular case, conditions that must be complied with in relation to-

(a) the provision by electronic means of any item to which this paragraph applies;

(b)the preservation by electronic means of any such item or of information contained in any such item.

3 (2) The items to which this paragraph applies are-

(a) the VAT invoice;

(b) any document that refers to a VAT invoice and is intended to amend it;

(c) any invoice described in regulations made for the purpose of section 6(8)(b) or 12(1)(b).

3(3) Regulations under this paragraph may make different provision for different circumstances.

This allows traders to fulfil their obligation to provide a VAT invoice by transmitting the invoice data electronically, for example direct computer-to-computer transmission , xml, or via a ‘VANS’ service

This means that any customer:

  • receiving VAT invoices on computer media; or
  • receiving and recording directly transmitted VAT invoice particulars,

does not need to hold paper VAT invoices to support his entitlement to input tax deduction. The issue of VAT invoices on computer media, or by the direct transmission of the required VAT invoice particulars, can also create a time of supply (tax point) for the purposes of the VAT Act 1994, section 6.