INVOICES

It has often been a bone of contention with smaller businesses not to issue sales invoices, or some form of receipt for work performed by the business for the customer.  When the trade is relatively small it could be argued that a duplicate receipt book would do just as well as an invoice.

This is not unusual practice, but what should be put on the receipt or invoice.

Firstly is the business VAT registered?

A VAT invoice must show:

·       an invoice number which is unique and follows on from the number of the previous invoice - if you spoil or cancel a serially numbered invoice, you must keep it to show to a VAT officer at your next VAT inspection

·       the seller's name or trading name, and address

·       the seller's VAT registration number

·       the invoice date

·       the time of supply (also known as tax point)

The tax point, or time of supply, is the date when a sale is considered to take place for VAT purposes. There are rules that tell you if this is the date of the actual supply, the date of the invoice or some other date, depending on the circumstances.
It's important to put the right date for the time of supply on your invoice, because both you and your customer will need this information to make sure the VAT on the invoice is accounted for on the right VAT Return.

·       the customer's name or trading name, and address

·       a description sufficient to identify the goods or services supplied to the customer

For each different type of item listed on the invoice, you must show:

·       the unit price or rate, excluding VAT

·       the quantity of goods or the extent of the services

·       the rate of VAT that applies to what's being sold

·       the total amount payable, excluding VAT

·       the rate of any cash discount

·       the total amount of VAT charged

If you make retail sales and you make a sale of goods or services for £250 or less including VAT you can issue a simplified VAT invoice:-

Simplified VAT invoices

A simplified VAT invoice only needs to show:

·       the seller's name and address

·       the seller's VAT registration number

·       the time of supply (tax point)

·       a description of the goods or services

Also, if the supply includes items at different VAT rates then for each different VAT rate, your simplified VAT invoice must also show:

·       the total price including VAT

·       the VAT rate applicable to the item

If you accept credit cards, then you can create a less detailed invoice by adapting the sales voucher you give the cardholder when you make the sale. It must show the information described in the six bullets above.

 

You do need to keep copies of any less detailed invoices you issue and copies of any invoices or receipts whether you are VAT registered or not.

There is much to HMRC’s legislation and it is advisable you seek the advice of a qualified appropriate accountant. 

Please contact :   Dawn Johnson FMAAT (see advert below)

 

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