Why a VAT invoice matters
A VAT invoice is the document your customer uses to reclaim input VAT, and the one HMRC relies on to verify a transaction. Only a VAT-registered business can issue one, and it must be raised within 30 days of the supply (or of payment, if you are paid in advance). If a mandatory detail is missing, your customer may be unable to recover the VAT and you can be asked to reissue the document. These rules are UK-specific: since Brexit the UK sets its own VAT regime under HMRC, separate from the EU VAT Directive, so the field list below applies to supplies taxed in the UK.
What a full UK VAT invoice must show
HMRC sets out the particulars a full VAT invoice must contain. For a typical freelancer, sole trader or small company, these are the details that have to appear on the document:
- Unique sequential number
- A unique invoice number that follows on from the last one, based on one or more series.
- Your business name and address
- The full name (or trading name) and address of you, the supplier.
- Your VAT registration number
- The VAT number under which you are registered with HMRC.
- Invoice date
- The date the invoice is issued (the time of issue).
- Time of supply (tax point)
- The date the goods or services were supplied, if it is different from the invoice date.
- Customer name and address
- The name and address of the customer you are billing.
- Description of goods or services
- A clear description of the goods or services supplied.
- Quantity per line
- For each line, the quantity of goods or the extent of the services.
- Unit price excluding VAT
- The price per unit or item, shown before VAT is added.
- VAT rate per line
- The rate of VAT charged on each line - standard, reduced, zero or exempt.
- VAT amount per line
- The amount of VAT charged on each line, if items are at different rates.
- Total excluding VAT
- The total amount payable, before VAT (the net total).
- Total VAT
- The total amount of VAT charged, expressed in sterling.
- Gross total
- The total amount payable including VAT.
The per-line VAT breakdown
The heart of a UK VAT invoice is the line-by-line breakdown. For each item you show the quantity, the unit price excluding VAT, and the VAT rate that applies. Where different lines carry different rates, you also show the VAT amount per line so the totals can be checked. The UK has three positive rates plus exempt supplies: the standard rate (currently 20%), the reduced rate (5%, for things such as domestic fuel and child car seats), and the zero rate (0%, for most food, books and children’s clothing). The invoice then sums these into a total excluding VAT, a total VAT amount, and a gross total. The VAT total must be shown in pounds sterling even if the rest of the invoice is in another currency.
Simplified and modified invoices
You do not always need a full invoice. A simplified VAT invoice can be issued for supplies of GBP 250 or less (including VAT). It is shorter: it needs your name, address and VAT number, the time of supply, a description of the goods or services, and - for each VAT rate - the total amount payable including VAT and the VAT rate charged. It does not need the customer details or a separate VAT amount. A modified VAT invoice is used for retail supplies over GBP 250: it is like a full invoice but shows the VAT-inclusive value of each standard-rated or reduced-rated item, with the totals (net, VAT and gross) set out separately. You must still give a full or simplified invoice if the customer asks for one.
Currency, copies and record keeping
You can invoice in any currency, but the total VAT due must also be shown in pounds sterling, converted at an HMRC-accepted exchange rate. Keep a copy of every VAT invoice you issue and receive: under UK rules VAT records must generally be kept for 6 years. If you are signed up to Making Tax Digital for VAT, those records have to be kept digitally and your returns filed through compatible software. Always confirm a detail against current HMRC guidance, because rates and thresholds change.
UK VAT invoice questions
What has to be on a full UK VAT invoice?
A full VAT invoice must show a unique sequential number, your business name, address and VAT registration number, the invoice date, the time of supply if different, the customer name and address, a description of the goods or services, and for each line the quantity, unit price excluding VAT, VAT rate and VAT amount. It then shows the total excluding VAT, the total VAT, and the gross total. The VAT total must be in sterling.
When can I use a simplified VAT invoice?
You can issue a simplified VAT invoice when the total is GBP 250 or less including VAT. It needs your name, address and VAT number, the time of supply, a description, and for each rate the VAT-inclusive amount and the VAT rate. It can leave out the customer details and the separate VAT amount that a full invoice requires.
What is a modified VAT invoice?
A modified VAT invoice is used for retail supplies above GBP 250. It is like a full invoice but shows the VAT-inclusive value of each standard-rated or reduced-rated item, with the net total, VAT total and gross total set out separately. Your customer has to agree to receive a modified invoice.
Do I need to be VAT-registered to issue a VAT invoice?
Yes. Only a VAT-registered business can issue a VAT invoice and charge VAT. If you are not registered, you issue an ordinary invoice with no VAT and no VAT registration number on it. You must register once your taxable turnover crosses the HMRC threshold.
How long do I have to issue a VAT invoice?
You normally have to issue a VAT invoice within 30 days of supplying the goods or services, or within 30 days of receiving payment if you are paid in advance. The date of supply is the tax point that determines which VAT period the sale falls into.
How long do I keep my UK VAT records?
HMRC requires VAT records, including copies of the invoices you issue and receive, to be kept for at least 6 years. If you use Making Tax Digital for VAT, those records must be kept digitally and returns submitted through compatible software.