Where a VAT-registered person makes supplies of goods or services to another VAT-registered person, subject to the standard or reduced rate, they must issue a full VAT invoice as this is the customer evidence to validate input tax claims.
Having said that, it is now possible for input tax claims to be allowed without documentary evidence, providing sufficient evidence of entitlement can be given to HMRC. Such claims are at HMRC's discretion. There is no need to give a VAT invoice to a non-registered person unless he asks for one.
Full VAT invoices you issue must show:
- a sequential number based on one or more series which uniquely identifies the document
- the time of the supply
- the date of issue of the document (where different to the time of supply)
- the name, address and VAT registration number of the supplier
- the name and address of the person to whom the goods or services are supplied
- a description sufficient to identify the goods or services supplied
- for each description, the quantity of the goods or the extent of the services, and the rate of VAT and the amount payable, excluding VAT, expressed in any currency
- the gross total amount payable, excluding VAT, expressed in any currency
- the rate of any cash discount offered
- the total amount of VAT chargeable, expressed in sterling
- the unit price
- the reason for any zero rate of exemption.
Special rules apply to invoices issued under a margin scheme or subject to a reverse charge. You need to follow the rules in the relevant notices for such supplies.
'Less detailed' and 'modified' VAT invoices
Apart from full VAT invoices, there are also 'less detailed' and 'modified' VAT invoices, which are only applicable to retail sales.
Less detailed invoices can be issued for VAT-inclusive supplies of £250 or less and need only show: name, address and VAT registration number of the supplier; the date and tax point; a description of the goods or services, and the VAT-inclusive total for each rate of VAT involved.
The VAT amount is then calculated by applying the VAT fraction (1/6 when the standard rate is 20%).
Note that exempt supplies cannot be shown on a less detailed VAT invoice.
The supplier can adapt credit card vouchers to constitute less detailed invoices by adding his registration number, a description of the goods or services, and the appropriate VAT rate, but if he gives a receipt as well, only one of them can be the VAT invoice.
Modified VAT invoices can be issued by retailers with the customer's agreement and even for sales over £250. They should show the VAT-inclusive value of each positive rated supply, then at the bottom: the total VAT-inclusive value of the positive rated supplies; the VAT due on them in Sterling; the VAT-exclusive value of the supplies, and the value of any zero-rated or exempt supplies.
If in any doubt, full VAT invoices should be issued.