Why a VAT invoice matters
A valid VAT invoice is primary evidence for a customer claiming input VAT. Only a VAT-registered business can issue one. HMRC says a VAT-registered supplier must normally issue a VAT invoice within 30 days when it supplies standard-rated or reduced-rated goods or services to another VAT-registered person. Retail, zero-rated, exempt, self-billed, margin-scheme and other supplies can follow different rules.
The tax point can change when an invoice or payment occurs in advance, and special wording applies to transactions such as reverse charge and margin schemes. Determine the supply and tax point first, then use the matching invoice rules.
What a full UK VAT invoice must show
HMRC sets out the particulars for a full VAT invoice. This checklist covers the general format, but special supplies can require extra wording or a different treatment. A free invoice generator can prepare common fields; it cannot decide the correct VAT treatment.
- 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 of issue, shown separately when it differs from the time of supply.
- Time of supply (tax point)
- The tax point determined under the VAT rules, which is not always the delivery 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 description
- The VAT rate that applies to each described supply. Exemption is a tax treatment, not a VAT rate.
- Net amount per description
- For each description, show the amount payable excluding VAT, expressed in any currency.
- Invoice totals
- Show the total excluding VAT and the total amount owed clearly.
- Total VAT
- The total amount of VAT charged, expressed in sterling.
- Cash discount
- Show the rate of any cash discount offered.
The per-line VAT breakdown
For each description, show the quantity of goods or extent of services, unit price, amount payable excluding VAT and applicable VAT rate. The UK currently has three VAT rates: 20% standard, 5% reduced and 0% zero. Exempt and outside-the-scope supplies are different treatments, not extra rates.
Classifications depend on the exact goods, services and circumstances. Use HMRC's current rate guidance instead of choosing a rate from a broad example. The total VAT chargeable must be expressed in pounds sterling even when other invoice amounts use another currency.
When can you use a simplified or modified invoice?
For an individual supply of GBP 250 or less including VAT, HMRC permits a less-detailed retail invoice or a simplified invoice for other businesses. It shows the supplier name, address and VAT number, tax point, description, and for each VAT rate the sterling total including VAT and the rate. Do not include exempt supplies in this format.
Above GBP 250, HMRC guidance provides for a full invoice or, where the customer agrees, a modified VAT invoice that shows VAT-inclusive rather than VAT-exclusive item values. Check the detailed conditions before choosing the format.
| Invoice type | General use | Customer details | Amount presentation |
|---|---|---|---|
| Full VAT invoice | Standard format when a VAT invoice is required | Required | Net amount per description and total VAT in sterling |
| Less-detailed or simplified VAT invoice | Qualifying supply of GBP 250 or less including VAT | Not generally required | Sterling VAT-inclusive total and rate for each applicable rate |
| Modified VAT invoice | Supply over GBP 250 where the customer agrees | Required | VAT-inclusive item values with the required totals |
Currency, copies and record keeping
You can express net invoice amounts in another currency, but the total VAT chargeable must also be shown in pounds sterling using an accepted conversion method. Keep copies of sales invoices, including canceled or mistaken ones, and keep purchase invoices.
VAT records are generally retained for at least 6 years, or 10 years for records under VAT OSS or former MOSS use. Businesses within Making Tax Digital must keep the prescribed records in functional compatible software unless an exemption applies. A PDF generator by itself is not the complete digital VAT record.
UK VAT invoice questions
What has to be on a full UK VAT invoice?
It must include a sequential unique number, the tax point and issue date where different, supplier name, address and VAT number, customer name and address, and a sufficient description. For each description show quantity or extent, unit price, VAT rate and amount payable excluding VAT. Show the total excluding VAT, any cash-discount rate, total VAT in sterling and total owed. Special supplies can need more.
When can I use a simplified VAT invoice?
For a qualifying supply of GBP 250 or less including VAT, it shows the supplier name, address and VAT number, tax point, description, and for each VAT rate the sterling total including VAT and rate. Customer details and a separate VAT amount are not generally required. Exempt supplies must not be included in this format.
What is a modified VAT invoice?
For a supply over GBP 250, a modified invoice is based on the full format but shows VAT-inclusive rather than VAT-exclusive item values. HMRC guidance says the customer must agree. Check the detailed requirements for the transaction.
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. Registration is not determined only by the domestic turnover threshold: compulsory, voluntary and non-established-business rules differ. Check your status before charging VAT.
How long do I have to issue a VAT invoice?
HMRC says a VAT invoice is normally due within 30 days of the supply where the invoicing duty applies. An invoice or payment in advance can create an earlier tax point, and continuous supplies, cash accounting and other cases have special rules.
How long do I keep my UK VAT records?
Keep VAT records for at least 6 years in general, or 10 years for VAT OSS or former MOSS records. Making Tax Digital requires prescribed records in functional compatible software unless an exemption applies.