VAT Invoice Requirements: What Every Invoice Must Show

VAT invoice requirements are set by HMRC: a full VAT invoice must include a unique sequential number, your VAT registration number, the date, both parties' details, a description of the supply, the VAT rate and the VAT charged. Retailers can use a shorter simplified invoice for sales of £250 or less including VAT.

Getting invoices right matters for both sides. Your customer needs a valid VAT invoice to reclaim the VAT you charge, and HMRC expects you to keep copies as part of your VAT records. This guide lists every required field, compares the invoice types, and gives you a checklist to test your template.

Key takeaways

• Only VAT-registered businesses can issue VAT invoices or charge VAT.
• A full VAT invoice has a fixed list of required details.
• Retailers can issue simplified invoices for supplies of £250 or less including VAT.
• Invoices should generally be issued within 30 days of the supply or payment.
• Keep copies of every invoice you issue and receive as part of your VAT records.

What counts as a VAT invoice

A VAT invoice is a document issued by a VAT-registered business that shows the details HMRC requires, so the customer can treat the VAT on it as input tax. It can be on paper or electronic. Receipts, statements and pro forma invoices do not count unless they carry all the required information. HMRC's rules are summarised on GOV.UK's VAT invoices page, with more detail in VAT Notice 700/21 on keeping VAT records.

The required details on a full VAT invoice

1. A unique invoice number that follows on from the last one.
2. Your business name and address.
3. Your VAT registration number.
4. The invoice date.
5. The time of supply (tax point), if it differs from the invoice date.
6. The customer's name or trading name and address.
7. A description of the goods or services.
8. For each item: quantity, unit price excluding VAT, VAT rate and any discount.
9. The total amount excluding VAT.
10. The total VAT charged, shown in sterling.

If you sell items at different VAT rates on one invoice, show the rate for each line and the VAT at each rate. If you invoice in a foreign currency, the VAT still needs to be shown in sterling.

Full, simplified and modified invoices compared

Timing and the tax point

The time of supply, or tax point, decides which VAT return a sale belongs to. For goods it is usually when they are delivered or made available; for services, when the work is completed. If you issue an invoice or receive payment before that, the earlier date usually becomes the tax point. Issue invoices promptly — generally within 30 days — so your records and your customer's match.

Invoices you receive: check before you reclaim

The same rules protect you as a buyer. To reclaim VAT on a purchase, you normally need a valid VAT invoice from the supplier. Before entering a purchase invoice, check that it shows the supplier's VAT number, that the VAT has been calculated at the right rate, and that it is addressed to your business rather than to you personally. A till receipt without a VAT number is not enough.

If a supplier's invoice is missing details, ask for a corrected one rather than guessing. Claiming VAT without proper evidence is one of the most common issues found when HMRC checks a VAT return. It is also worth checking a new supplier's VAT number if anything looks unusual, since an invoice from a business that is not actually registered does not give you the right to reclaim.

Checklist: test your invoice template

1. Numbering: does your software issue unique numbers in an unbroken sequence?
2. VAT number: is it printed, and is it the correct one?
3. Customer details: are the name and address captured for every invoice?
4. Line detail: do lines show quantity, unit price excluding VAT and the VAT rate?
5. Totals: are net, VAT and gross totals all shown, with VAT in sterling?
6. Credit notes: do corrections go through a credit note rather than deleting the invoice?
7. Storage: are copies kept where you can find them for the full retention period?

Worked example (illustrative example)

"Fern & Twine Ltd", an invented illustrative example, is a VAT-registered shop selling homeware and running paid workshops. For a walk-in customer buying two cushions for £60 including VAT, the till produces a simplified invoice showing the business details, VAT number, date, description, VAT rate and total. That is enough, because the sale is under £250.

A local café then books a staff workshop costing £900 plus VAT and asks for an invoice so it can reclaim the VAT. The shop issues a full VAT invoice with the next number in its sequence, the café's name and address, a description of the workshop, the price excluding VAT, the VAT rate, the VAT amount and the total. When the café later changes the date, the shop issues a revised invoice through a credit note rather than editing the original. The business and figures are invented for illustration.

Common mistakes

• Missing the VAT number, which stops customers reclaiming VAT.
• Gaps or duplicates in numbering, often from using several templates.
• Treating a pro forma as the VAT invoice.
• Editing issued invoices instead of raising a credit note.
• Showing VAT before registration takes effect.

Get your VAT paperwork right

Our VAT returns service starts from £120 per quarter and includes checking that your invoicing supports the return. Our bookkeeping service, from £150 per month, keeps invoices and receipts in order all year. Read our guides to the VAT Flat Rate Scheme vs standard VAT and bookkeeping for VAT-registered businesses for the wider picture.

Want a second pair of eyes on your invoice template? Contact us or see our pricing.