Invoicing in the UK
According to Regulation 13 of the VAT Regulations 1995, businesses registered for VAT in the UK are generally obligated to provide VAT invoices to taxable persons for all their taxable supplies within the UK. Failure to do so, when requested by a VAT-registered customer, may result in fines.
However, if the supply consists solely of zero-rated items or exempt items within the UK, a VAT invoice is not required.
Learn more about invoice requirements in the UK in our comprehensive guide.
Invoicing Information
The general rule of providing a VAT invoice has its exceptions. For example, retailers don’t need to give out a VAT invoice unless a customer specifically asks for it. Furthermore, there are specific situations where suppliers shouldn’t produce a VAT invoice. This applies to suppliers not registered for VAT, some unique billing methods, and when sending “proforma” invoices for goods not yet delivered but invoiced for reasons other than VAT.
Essential Invoice Details:
- Comprehensive VAT invoice details.
- A distinct reference number.
- The date of the transaction.
- Issue date of the document (if different from the transaction date).
- Supplier’s name, address, and VAT registration details.
- The recipient’s name and address for the products and/or services.
- Applicable VAT rate for any cash discount.
- A note stating if the supply is VAT-free or at a zero rate.
For claims related to input taxes, a VAT invoice is mandatory and should be provided within 30 days of the transaction.
Simplified Invoice:
Invoices of up to GBP 250,000 can be simplified. However, if the value of goods and services exceeds GBP 250,000, buyers and sellers can mutually agree on a modified VAT invoice, which might display VAT as inclusive instead of exclusive.
Selling in the UK?
Electronic VAT invoice
In UK, VAT invoices can be issued electronically, but it is not mandatory. Taxpayers can issue electronic VAT invoices, provided they have obtained prior agreement from the recipient. It is generally not permitted to issue both paper and electronic invoices for the same supply.
When issuing electronic invoices, certain technical requirements must be met to ensure the authenticity of their origin, the integrity of the data, and the legibility of their content. Taxpayers can comply with these requirements by using a qualified electronic signature or Electronic Data Interchange (EDI) methods. These measures help maintain the security and reliability of electronic invoicing processes.
Self-Invoicing
In the UK, under certain conditions like the mutual adoption of a self-billing system by both the supplier and recipient, this is allowed. The arrangement must meet the criteria set out in HMRC’s Self-billing guidance (VAT Notice 700/62), and there’s no need for HMRC’s direct approval.
Last Updated: 30/08/2023
Disclaimer
The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at support@gvc.tax
