A VAT invoice – also called a tax invoice – is the document every VAT-registered business in the UK must issue when supplying taxable goods or services. Unlike an ordinary invoice, it includes a full VAT breakdown: the net amount, the VAT rate and the VAT charged. For your customer, it is a critical document – without a correctly issued VAT invoice, they cannot reclaim input VAT from HMRC. On MyInvoiceOnline.co.uk you can create a fully compliant VAT invoice in seconds – the VAT is calculated automatically.
What must a VAT invoice include?
The required contents of a VAT invoice are set out in UK VAT legislation and HMRC guidance. If even one mandatory field is missing, your customer may be unable to reclaim input VAT – and you risk penalties if HMRC audits your records.
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A full VAT invoice must show the VAT registration number of both the supplier and the customer. Without it, the customer cannot reclaim input VAT. Always verify that the VAT number is valid – you can check it on the HMRC VAT number checker.
The tax point (time of supply) is not the same as the invoice date. The tax point is the date you delivered the goods or performed the service – and it is this date that determines which VAT return period the transaction falls into. If you issue the invoice or receive payment before the basic tax point, the earlier date becomes the actual tax point. On MyInvoiceOnline.co.uk you enter the tax point when creating the invoice and the system handles the rest automatically.
When and why is a VAT invoice used?
You must issue a VAT invoice whenever you make a taxable supply – that is, every time you sell goods or provide services as a VAT-registered business:
Standard sale of goods or services – The VAT invoice serves as both a request for payment and a tax document for VAT purposes. You must issue it within 30 days of the tax point.
Basis for your VAT return – You report and pay output VAT to HMRC based on the invoices you issue. Every invoice must contain all mandatory fields – otherwise you risk problems during an HMRC compliance check.
Input VAT recovery for your customer – Your customer (if also VAT-registered) needs a correctly issued VAT invoice to reclaim the VAT they paid on the purchase. A missing or incorrect invoice means they lose the right to deduct.
Cross-border supplies – When supplying goods or services to a business in another country, you may need to apply the reverse charge. The invoice must still include the VAT numbers of both parties and a note stating: "Reverse charge: Customer to account for VAT to HMRC."
If you are invoicing a customer who is not VAT-registered, you still show VAT on the invoice in exactly the same way – the customer simply cannot reclaim it. You must always state the VAT rate and amount, regardless of your customer's VAT status.
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