What Is a VAT Invoice?
A VAT invoice is a document issued by a VAT-registered business to its customers. It provides a formal record of a sale and shows the amount of VAT charged. VAT-registered businesses are legally required to issue VAT invoices to other VAT-registered customers when they make a taxable supply.
When Do You Need to Issue a VAT Invoice?
You must issue a VAT invoice when you supply goods or services to another VAT-registered business. You have up to 30 days from the date of supply to issue the invoice. For retail sales to non-VAT-registered customers, a simplified invoice may be acceptable.
What Must a VAT Invoice Include?
A full VAT invoice must include the following information:
- A unique invoice number (sequential)
- Your business name and address
- Your VAT registration number
- The invoice date
- The tax point (the date the supply took place, if different from the invoice date)
- Your customer's name and address
- A description of the goods or services supplied
- The quantity and unit price of each item
- The rate of VAT applied (e.g. 20%, 5%, or 0%)
- The total amount excluding VAT
- The total VAT charged
- The total amount including VAT
Types of VAT Invoice
There are three types of VAT invoice:
- Full VAT invoice — required for most B2B transactions. Must include all the details listed above.
- Simplified VAT invoice — can be used for supplies under £250 (including VAT). Does not need to include the customer's details or the net amount.
- Modified VAT invoice — used for retail supplies where the customer is VAT-registered. Shows the VAT-inclusive price for each item.
VAT Rates on Invoices
The UK has three main VAT rates:
- Standard rate (20%) — applies to most goods and services
- Reduced rate (5%) — applies to certain goods and services, such as domestic energy and children's car seats
- Zero rate (0%) — applies to items such as most food, children's clothing, and books
Some supplies are VAT-exempt (e.g. financial services, education, healthcare) and should not appear on a VAT invoice as a taxable supply.
Record Keeping for VAT Invoices
HMRC requires VAT-registered businesses to keep copies of all VAT invoices — both issued and received — for at least 6 years. Under Making Tax Digital (MTD), these records must be kept digitally using compatible software.
Common VAT Invoice Mistakes to Avoid
- Missing or incorrect VAT registration number
- Failing to include a unique invoice number
- Applying the wrong VAT rate
- Not including the tax point where it differs from the invoice date
- Issuing invoices late (beyond the 30-day window)
Need Help with Your Business Address for VAT Correspondence?
HMRC sends your VAT registration certificate and ongoing VAT correspondence to your registered business address. Spectre Offices provides registered office address services and mail scanning across the UK, so you never miss important VAT communications. Our HMRC & VAT Correspondence Support service can also help businesses manage HMRC admin more confidently.
This blog is for general information purposes only and does not constitute financial or tax advice. Please consult a qualified accountant or tax adviser for guidance specific to your business.
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