VAT record keeping
2. 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
You can’t reclaim VAT using an invalid invoice, pro-forma invoice, statement or delivery note.
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 retails supplies under £250 - and for other supplies from 1 January 2013
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|
|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.
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.
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).
You don’t 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.
You don’t need to issue a VAT invoice if: