VAT increases to 20% with effect from the 4th January. The normal tax point rules…
In my last post about reclaiming VAT on expenses incurred by an employee, I talked about getting a supplier to make out an invoice directly to the company. But what should be included on a VAT invoice, and what will happen if any of the items that should be included, aren’t?
Valid VAT invoices
For an invoice to be valid in the taxman’s eyes, all of the following must be present on the invoice:
- The invoice must contain a unique identifying invoice number
- The date of supply of goods/ services should be displayed
- The date of the invoice (the tax point)
- The name and address of the purchaser
- The type of supply (e.g sale of goods, lease, rental, commission etc)
- A description of the goods or services supplied
- For each description, a quantity of goods or extent of services supplied
- The total amount payable excluding VAT
- The rate and amount of any discounts offered
- The rates of VAT applied
- The amount of tax chargeable at each VAT rate
- The total amount of VAT chargeable
If any of the above is missing from an invoice, it is not a valid invoice for tax purposes and there is no legal entitlement to reclaim VAT on it. It has been known for input VAT claims to be refused because of minor ommissions.
VAT invoice Tip
I would recommend using the list above as a checklist for supplier invoices. Make sure you carry out spot checks on invoices you receive to ensure they meet all the criteria for being valid and that you don’t miss out on potential VAT reclaims.