VAT record keeping

VAT invoices

Only VAT-registered businesses can issue VAT invoices and you must:

• issue and keep valid invoices - these can be paper or electronic
• keep copies of all the sales invoices you issue even if you cancel them or produce one by mistake
• keep all purchase invoices for items you buy

Valid invoices

You’ll use a full VAT invoice for most transactions. You can use:

• a modified invoice for retail supplies over £250
• a simplified invoice for retail supplies under £250 - and for other supplies from 1 January 2013

You cannot reclaim VAT using an invalid invoice, pro-forma invoice, statement or delivery note.

Include the following on your invoice, depending on which type you use.

Invoice information	Full invoice	Simplified invoice	Modified invoice
Unique invoice number that follows on from the last invoice	Yes	Yes	Yes
Your business name and address	Yes	Yes	Yes
Your VAT number	Yes	Yes	Yes
Date	Yes	No	Yes
The tax point (or ‘time of supply’) if this is different from the invoice date	Yes	Yes	Yes
Customer’s name or trading name, and address	Yes	No	Yes
Description of the goods or services	Yes	Yes	Yes
Total amount excluding VAT	Yes	No	Yes
Total amount of VAT	Yes	No	Yes
Price per item, excluding VAT	Yes	No	Yes
Quantity of each type of item	Yes	No	Yes
Rate of any discount per item	Yes	No	Yes
Rate of VAT charged per item - if an item is exempt or zero-rated make clear no VAT on these items	Yes	Yes (1)	Yes
Total amount including VAT	No	Yes (1)	Yes

(1) If items are charged at different VAT rates, then show this for each.

Accounting schemes

If you use the Cash Accounting Scheme you have to stamp an invoice with the amount of cash paid and the date.

There are different rules for record keeping and invoicing if you use a VAT Margin Scheme.

Deadlines

Usually VAT invoices must be issued within 30 days of the date of supply or the date of payment (if you’re paid in advance).

International trade

You do not have to show all amounts on your invoices in sterling. If you issue VAT invoices in a foreign currency or language, you must:

• show the total VAT payable in sterling on your VAT invoice if the supply takes place in the UK
• be able to provide an English translation of any invoice within 30 days if asked to do so by a visiting VAT officer

Converting to sterling

To convert to sterling you can:

• use the market selling rate at the time of supply
• use the European Central Bank’s rate
• use HMRC’s period rates of exchange - the rates usually stay the same for each calendar month
• apply to HMRC to use a different method to account for the VAT

There are different rules if you use the Tour Operator’s Scheme.

Exceptions

You do not need to issue a VAT invoice if:

• your invoice is only for exempt or zero-rated sales within the UK
• you’re giving goods as a gift
• you sell goods under a VAT second-hand margin scheme
• your customer operates a self-billing arrangement

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