What is a VAT Receipt?

What is a VAT Receipt?

If you’re VAT registered you will no doubt have been advised by your accountant to always obtain a VAT receipt (or invoice) from your suppliers. Many of our clients provide us with what they believe to be VAT receipts but in actual fact they’re not. So….

What is a VAT receipt and why do you need it?

A VAT receipt will be provided by VAT registered suppliers to you, the customer. It will show details of the sale including the tax date, the suppliers VAT registration number and the amount paid for the goods or services. Most importantly, it will show the amount of VAT that the supplier has charged to you (if applicable). A VAT receipt can be in either paper or electronic format.

Delivery notes, letters or email correspondence are not valid VAT receipts and you cannot reclaim VAT using these documents.

To reclaim VAT on the purchases that you’ve acquired for your business you need to have a valid VAT receipt (or VAT invoice) as proof of the purchase and that you’ve paid VAT on that purchase. If you don’t have a valid VAT receipt you cannot reclaim the VAT.

What should the VAT receipt show?

A valid VAT receipt should include all of the following details:

  • A unique invoice number
  • The seller’s name or trading name and address
  • The seller’s VAT registration number
  • The invoice date
  • The tax date (the date of supply which is also known as tax point – if different from the invoice date)
  • Your name or trading name and address (i.e. the customer)
  • A description of the goods or services supplied to you

Simplified VAT receipts

VAT receipts with all of the above detail are not always necessary. Retailers can issue less detailed invoices for sales under £250 (including VAT) and are not required to issue an invoice unless the customer requests it. These need only show:
  • The seller’s name and address
  • The seller’s VAT registration number
  • The date of supply (tax point)
  • A description of the goods or services supplied
If the sale includes items at different VAT rates then for each different VAT rate the  simplified VAT receipt must also show:
  •  The total price including VAT
  •  The VAT rate applicable to the item
For example, if you buy an electrical item from Tesco for your business (such as a new computer) the price you pay will include VAT at the standard rate (20%). If you also buy postage stamps for your business whilst you’re in the store, these won’t include VAT because they’re exempt from VAT. As the sale includes items at different VAT rates, the VAT receipt must show the different rates.

Modified VAT Invoices

Retails who provide goods or services for more than £250 including VAT may issue “modifield invoices” if their customer is in agreement. This will show the VAT inclusive amounts (rather than the VAT exclusive values) for each standard rate or reduced rate item. At the foot of the invoice, it must show separately the total:

  • VAT payable on those items
  • Value of those items excluding VAT
  • Value of any zero rated items included on the invoice
  • Value of any exempt items included on the invoice

Electronic Invoices

You can issue, receive and store your VAT invoices in electronic format. You don’t need to tell HMRC if you plan to issue, receive and/or store invoices electronically.

Financial Penalties

A VAT You may be liable to a financial penalty if you do not issue a VAT invoice when asked to do so by a VAT registered person.

Let’s Chat!

Got a VAT receipt question? Give our award winning accountants in Evesham a call on 01386 366741 or send us a message and we’ll be happy to help.