VAT record keeping

3. VAT records

Records you must keep include:

  • copies of all invoices you issue
  • all invoices you receive (originals or electronic copies)
  • self-billing agreements - this is where the customer prepares the invoice
  • name, address and VAT number of any self-billing suppliers
  • debit or credit notes
  • import and export records
  • records of items you can’t reclaim VAT on - eg business entertainment
  • records of any goods you give away or take from stock for your private use
  • records of all the zero-rated, reduced or VAT exempt items you buy or sell
  • a VAT account

If you supply digital services in the EU and use VAT MOSS, you must keep additional records.

You must also keep general business records such as bank statements, cash books, cheque stubs, paying-in slips and till rolls.

If you use the Cash Accounting Scheme you must use these records to match them against your payment records and receipts.

HM Revenue and Customs (HMRC) may check your records to make sure you’re paying the right amount of tax.

Retailers

If you’re a retailer you don’t have to issue VAT invoices unless a customer asks for one. Keep a copy if you do. Retailers can issue ‘simplified invoices’ for supplies under £250.

Debit and credit notes

When you return goods to a supplier or a customer returns goods to you, the balance of payment can be settled with a credit or debit note.

Record these in your accounts and keep any original notes.