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VAT Invoice Essentials

VAT Invoice Essentials

If you are registered for VAT you must set out your sales invoices in a particular way. If your customer is VAT registered, they will need a valid VAT invoice for them to be able to claim VAT back and by law you must send them one.

Some VAT Invoice Essential Elements:

  • Unique invoice number
  • Your name or trading name, and address
  • Your VAT registration number
  • Invoice date
  • The customer’s name or trading name, and address
  • Details of the goods or services supplied to the customer

There are other areas that you need to be clear about in the body of the invoice. Check out HMRC’s website for more information.

What’s a Proforma Invoice?

This is not a VAT invoice. It is an indication to the prospective customer of how his invoice will look if he pays in advance or if he needs to see the detail before agreeing to the contract. If you’ve been given a proforma invoice and have purchased a service or goods, you are entitled to a separate VAT invoice from the supplier. You cannot claim back the VAT without it.

Why won’t a statement or an order acknowledgement do instead?

There are lots of bits of paper when you make a purchase or a sale. But only a VAT invoice will do if you want to claim back the VAT. You could face penalties and may have to pay back VAT if you claim back VAT on a purchase without a VAT invoice. So your customers have every right to insist on a VAT invoice from you.

Invoicing a Business Customer in the EC

You should find out their VAT number and show this at the top of your invoice to them. Whether you charge them VAT or not depends on a number of factors.

Check out HMRC’s website for more information.