VAT invoice requirements in the UK

• You must use VAT invoices if you and your customer are VAT registered (GOV.UK invoicing guidance).
• You can only charge VAT once your business is registered for VAT. A VAT registered business's invoices must include its VAT number and show the VAT separately (charge, reclaim and record VAT).
• You must register for VAT if your taxable turnover for the last 12 months goes over £90,000, or you expect it to go over £90,000 in the next 30 days (when to register).

Not registered for VAT? Do not add VAT or a VAT number to your invoices. Use our invoice template instead.

HMRC sets out the contents in section 4 of VAT Notice 700/21, record keeping. A full VAT invoice must show:

• a sequential number, based on one or more series, that uniquely identifies the invoice
• the time of supply (the tax point), and the date of issue if that is different
• your name, address and VAT registration number
• your customer's name and address
• a description of the goods or services, with the quantity or extent of each
• for each line: the rate of VAT and the amount payable excluding VAT
• the unit price, where it applies
• the rate of any cash discount you offer
• the gross total excluding VAT
• the total VAT charged, in sterling

Special rules apply to invoices under a margin scheme and to invoices where the reverse charge applies, so check the notice if either is relevant to you.

Where the total value of a supply, including VAT, is £250 or less, you may issue a simplified VAT invoice. It must show:

• your name, address and VAT registration number
• the time of supply
• a description of the goods or services
• the total payable including VAT, and the VAT rate for each rate that applies

Exempt supplies must not be included on a simplified VAT invoice.

For retail sales over £250, VAT Notice 700/21 also allows a modified VAT invoice, which shows the values including VAT. Read section 4 of the notice for the conditions before you use one.

Normally you must issue a VAT invoice within 30 days of the date you make the supply (VAT Notice 700/21, section 3).

You can show the amounts excluding VAT and the gross total in any currency, but the total VAT must be shown in sterling (VAT Notice 700, paragraph 16.4). To convert, HMRC allows the UK market selling rate at the time of supply, or an HMRC period rate if you have chosen to use those (paragraph 7.6).

Most goods and services are charged at the standard rate, currently 20%. Some are charged at the reduced rate, currently 5%. Zero rated sales are still taxable at 0%, so they still go on your invoices (charge, reclaim and record VAT). VAT rates can change, so check GOV.UK if you are unsure which rate applies.

A proforma invoice is not a VAT invoice and cannot be used to reclaim VAT, even if it shows every detail of one. HMRC asks for it to be clearly marked "this is not a VAT invoice" (VAT Notice 700, paragraph 17.3). Quotes and statements of account are not VAT invoices either. See proforma invoices, credit notes and other types.

Construction businesses in the Construction Industry Scheme may need the VAT domestic reverse charge instead of charging VAT in the usual way. The CIS invoice guide explains it.

When you create a document in InfinitInvoice, you choose what kind it is. The VAT related kinds are:

• VAT invoice: The full VAT invoice most VAT registered businesses send.
• Simplified VAT invoice: For sales up to £250 including VAT. Shorter, and the customer address is optional.
• Modified VAT invoice: Retail sales over £250 where the customer agreed to VAT inclusive lines.
• Overseas services invoice: Services to a business customer outside the UK, where they account for the VAT.
• Construction reverse charge: Construction work where the customer accounts for the VAT. Can include a CIS deduction.
• Margin scheme invoice: Second hand goods, art or antiques. VAT is never shown separately.

A VAT invoice carries your VAT number, the tax point, the VAT rate and amount on each line and a VAT summary by rate. You can bill in pounds or in six other currencies on every plan.