Who has to issue a VAT invoice, and when
HMRC’s record-keeping guide, VAT Notice 700/21, is short on this point: only VAT-registered businesses can issue VAT invoices, and if you are registered you must issue one whenever you supply standard-rated or reduced-rated goods or services to another VAT-registered person. Normally, the invoice must be issued within 30 days of the date you make the supply.
The invoice matters as much to your customer as to you. HMRC describes the VAT invoice as the primary evidence that allows a business customer to recover the VAT you have charged. An invoice that is missing a required detail gives your customer a reason to send it back, and a reason to delay paying it.
The notice lists four situations where you do not always have to issue a VAT invoice to a registered customer:
- your customer operates a self-billing arrangement, or you issue authenticated receipts;
- you make a gift of goods on which VAT is due;
- you sell goods under one of the second-hand margin schemes;
- the invoice is only for exempt or zero-rated sales within the UK.
The 11 details on a full VAT invoice
Section 4.1 of Notice 700/21 sets out what you must show on any VAT invoice you issue:
| Detail | What it means in practice |
|---|---|
| Sequential number | A number based on one or more series that uniquely identifies the document |
| Time of supply | The tax point of the sale |
| Date of issue | Only where it differs from the time of supply |
| Your details | Name, address and VAT registration number of the supplier |
| Customer details | Name and address of the person you are supplying |
| Description | Enough to identify the goods or services supplied |
| Quantity, rate and net amount | For each description: the quantity of goods or extent of services, the VAT rate and the amount payable excluding VAT (in any currency) |
| Gross total excluding VAT | The total amount payable before VAT (in any currency) |
| Cash discount | The rate of any cash discount offered |
| Total VAT | The total VAT chargeable, expressed in sterling |
| Unit price | The price per unit of each item |
HMRC adds that special rules apply to invoices issued under a margin scheme or subject to a reverse charge. One recent change is worth knowing: since an update of 18 March 2024, the notice no longer lists the reason for any zero rate or exemption among the details you must include.
Businesses in Northern Ireland invoicing a person in an EU member state must also show the letters “GB” before their registration number for cross-border supplies, the customer’s EU registration number preceded by its country code, and a reference to any new means of transport.
Simplified and modified invoices: the £250 threshold
Small sales do not need the full set of details. If the charge for an individual supply is £250 or less, including VAT, you can issue a simplified invoice showing:
- your name, address and VAT registration number;
- the time of supply (tax point);
- a description that identifies the goods or services;
- for each VAT rate, the total amount payable including VAT, in sterling, and the VAT rate charged.
Exempt supplies must not be included on this type of invoice. The same £250 rule applies to retailers and to other businesses.
Above £250, if you are asked for a VAT invoice you must issue either a full VAT invoice or a modified VAT invoice, which shows VAT-inclusive rather than VAT-exclusive values. It suits businesses that quote VAT-inclusive prices.
Tip. The £250 threshold applies to the charge for the individual supply, including VAT, not to your customer’s monthly spend. A £300 sale needs a full or modified invoice even if the customer usually buys in smaller amounts.
Foreign currency and reverse charge invoices
Invoicing in euros or dollars
You can price and invoice in a foreign currency, but if UK VAT is due, HMRC’s guidance on foreign currency transactions requires the invoice to show in sterling the total net value of goods and services at each VAT rate and the amount of VAT at each rate. Two conversion methods are accepted as standard: the UK market selling rate at the time of supply (rates published in national newspapers are acceptable), or HMRC’s published period rates of exchange, which let you use one rate for a whole calendar month. Any other method needs HMRC’s approval, and forward rates cannot be used.
Reverse charge invoices
When your customer, not you, accounts for the VAT, the invoice must make that clear. For the domestic reverse charge on building and construction services, HMRC’s technical guide says the invoice must show all the usual VAT invoice details, note that the reverse charge applies, and state the VAT due (or the rate, if the amount cannot be shown) without adding it to the amount charged. The VAT Regulations 1995 require the reference “reverse charge”; HMRC gives “Customer to pay the VAT to HMRC” and “S55A VATA 94 applies” as examples. Our guide to the Construction Industry Scheme and reverse charge covers when it applies.
Worked example: a £2,700 consultancy invoice
A VAT-registered marketing consultancy completes a three-day workshop and a written report for a VAT-registered client on 2 October and invoices on 6 October, well within the 30-day limit. A compliant full VAT invoice shows:
- Invoice number 2026-118, the next in the consultancy’s sequence.
- Time of supply: 2 October 2026; date of issue: 6 October 2026.
- The consultancy’s name, address and VAT registration number.
- The client’s name and address.
- Workshop facilitation: 3 days at £650 = £1,950 excluding VAT, VAT rate 20%.
- Written report: 1 at £300 = £300 excluding VAT, VAT rate 20%.
- Total excluding VAT: £2,250; total VAT: £450; amount payable: £2,700.
- Cash discount: none offered (or the rate, if one is).
Twenty per cent is the current standard rate according to GOV.UK. Had the same consultancy sold a £240 training voucher including VAT to a walk-in customer, a simplified invoice would have done: name, address, VAT number, tax point, description, £240 total including VAT and the 20% rate.
If you are not VAT registered
You cannot issue a VAT invoice or charge VAT, but your invoices still have minimum contents. GOV.UK’s guide to invoicing lists a unique identification number, your business name, address and contact information, the customer’s name and address, a clear description of what you are charging for, the supply date, the invoice date, the amounts charged and the total owed.
Sole traders must also show their own name and any business name used, and, if trading under a business name, an address where legal documents can be delivered. Limited companies must use their full name as it appears on the certificate of incorporation, and if they choose to name directors on invoices, they must name all of them.
Keeping copies, and invoicing electronically
You must keep a copy of every VAT invoice you issue, and VAT records must generally be kept for at least 6 years. Electronic invoicing is allowed; HMRC points to VAT Notice 700/63 for the specific rules. The UK has also consulted on wider e-invoicing: see our UK e-invoicing roadmap. If an invoice goes unpaid despite being correct, our step-by-step guide for UK businesses explains what to do next.
Frequently asked questions
How long do I have to issue a VAT invoice?
HMRC VAT Notice 700/21 says you must normally issue a VAT invoice within 30 days of the date you make the supply.
Can I issue a simplified VAT invoice?
Yes, if the charge for the individual supply is £250 or less including VAT. It must show your name, address and VAT number, the tax point, a description and, for each VAT rate, the VAT-inclusive total in sterling and the rate. Exempt supplies cannot be included.
What is a modified VAT invoice?
A VAT invoice that shows VAT-inclusive values instead of VAT-exclusive ones. Above £250, if a customer asks for a VAT invoice, you must issue either a full VAT invoice or a modified one.
Can I send a VAT invoice in euros?
Yes, but if UK VAT is due the invoice must show the net value and the VAT at each rate in sterling, converted at the UK market selling rate or HMRC’s period rate of exchange, unless HMRC approves another method.
Do I need to show why a sale is zero-rated or exempt?
Since HMRC updated Notice 700/21 on 18 March 2024, the reason for any zero rate or exemption is no longer in the list of required details. Note also that you do not always have to issue a VAT invoice for exempt or zero-rated UK sales.
Sources
- HMRC, Record keeping (VAT Notice 700/21) (gov.uk)
- GOV.UK, Transactions in foreign currencies and VAT (gov.uk)
- GOV.UK, Invoicing and taking payment from customers: what invoices must include (gov.uk)
- HMRC, VAT domestic reverse charge technical guide (gov.uk)
- GOV.UK, Charge, reclaim and record VAT (gov.uk)
This article summarises the official texts to help you get organised. It is not a substitute for personalised advice from your accountant.