What counts as a VAT invoice?

We’re often asked what counts as a VAT invoice, and why we’re so pernickerty about getting a proper VAT invoice from you, so here’s our foolproof guide.

 

But first the easy bit!  Here’s what DOESN’T count as a VAT invoice:

  • Delivery note
  • Proforma invoice (a VAT invoice should be produced on payment of the proforma)
  • Statement
  • Order confirmation
  • Email confirmation
  • Cash withdrawal

So don’t send these to Receipt Bank!

But why all the fuss about a VAT invoice? Well it’s not us, its HMRC.

If you’re VAT registered, you can claim back VAT on relevant business expenses. But you can only do this if you have a proper VAT invoice.
If you can’t produce a VAT invoice when HMRC ask for it, they will make you pay back the VAT you’ve claimed on your VAT return.
They may also charge you interest, and possibly penalties for making errors on your VAT return.

 

What does a VAT invoice need to include (get a cuppa, you’ll need one):

  • Customer’s business name and address
  • Supplier’s business name and address
  • Supplier’s VAT number
  • Invoice date
  • Tax point (date of supply)
  • Invoice number (HMRC like these to be in sequence, so that they can see if any are “missing”)
  • Description of goods or services
  • Price per item
  • Quantities of each item
  • Total before VAT
  • VAT rate per item and amount
  • Total including VAT

Luckily there is a Simplified Invoice layout if your total is less than £250, which only needs to include:

  • Supplier’s business name and address
  • Supplier’s VAT numberInvoice date
  • Tax point (date of supply)
  • Invoice number (HMRC like these to be in sequence, so that they can see if any are “missing”)
  • Description of goods or services
  • Total including VAT

If you’re still drinking that cuppa, you can read more here on HMRC’s guidance.

How can you make raising your invoices easier?

Now is a great time to mention Xero’s new invoicing feature!

Benefits to you:

  • Easy to use
  • Ready made invoice template with all the important bits mentioned above
  • Time saving efficiencies
  • Auto save
  • Easily accessible anywhere, any time

Thank you for reading.

Sharon

 

 

 

 

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Kinder Pocock are an approachable cloud-savvy firm of accountants based in Herefordshire but supporting businesses on the move.

We specialise in Security/Technology, Design and Indie Hospitality businesses.

@KinderPocock

01432 273400

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