Every business that sells on credit sends invoices, but only VAT-registered businesses can send VAT invoices. A VAT invoice has extra details that let your customer reclaim the VAT they paid you. Sending the wrong kind of invoice can stop a customer reclaiming VAT — or, if you're not registered, can break the law.
In short: a normal invoice asks for payment. A VAT invoice asks for payment and records the VAT: it must show your VAT registration number, the VAT rate and the amount of VAT. Only VAT-registered businesses can issue one.
What a normal invoice must show
If you're not VAT registered, your invoice should include:
- A unique invoice number that follows on from your last one
- Your business name and address (and company details if you're a limited company)
- Your customer's name and address
- A clear description of what you're charging for
- The date the goods or services were supplied, and the invoice date
- The amount being charged and the total due
It must not show VAT. If you're not registered, you can't charge VAT or add "+ VAT" to your prices. Our guide on how to create an invoice covers normal invoices step by step.
What a full VAT invoice must also show
A full VAT invoice needs everything above, plus:
- Your VAT registration number
- The time of supply (tax point), if different from the invoice date
- For each item: the unit price, quantity and the VAT rate charged
- The total amount excluding VAT
- The total VAT charged, shown in pounds sterling
- The rate of any discount per item
- The total amount including VAT
If an invoice includes zero-rated or exempt items, they must be shown clearly and show that no VAT is due on them. For the full list, see VAT invoices: what you need to include.
Side-by-side comparison
| Detail | Normal invoice | Full VAT invoice |
|---|---|---|
| Unique invoice number | Yes | Yes |
| Seller and customer names and addresses | Yes | Yes |
| Description, date and amounts | Yes | Yes |
| VAT registration number | No | Yes |
| Time of supply (tax point) | No | Yes |
| VAT rate for each item | No | Yes |
| Total excluding VAT and total VAT | No | Yes |
| Who can issue it | Any business | VAT-registered businesses only |
| Lets the customer reclaim VAT | No | Yes |
Simplified VAT invoices (£250 or less)
If you're a retailer and the total, including VAT, is £250 or less, you can issue a simplified VAT invoice — the kind of detailed till receipt a shop gives you. It only needs to show:
- Your name and address, and your VAT registration number
- The time of supply
- A description of the goods or services
- The total payable including VAT
- The VAT rate for each item
If the supply includes items at different VAT rates, the simplified invoice must show the total for each rate. Simplified invoices can't be used for supplies to other EU member states.
Modified VAT invoices (over £250)
For retail sales over £250, you can issue a modified invoice if your customer agrees. It shows VAT-inclusive prices for each item rather than VAT-exclusive ones, and at the bottom shows the total excluding VAT, the total VAT and the total including VAT.
Documents that are not VAT invoices
- Pro forma invoices — a request for payment before supply. Mark them "This is not a VAT invoice" and issue a proper VAT invoice once the supply is made.
- Quotes and estimates
- Statements of account and payment reminders
- Delivery notes
- Card payment slips that don't show the VAT details
Your customer can't use any of these to reclaim VAT.
When you must issue a VAT invoice
If you're VAT registered, you must usually issue a VAT invoice within 30 days of the date of supply (or of receiving payment, if paid in advance) when you sell to another VAT-registered business. You don't have to issue VAT invoices for retail sales to the public unless the customer asks, or if all the items are exempt or zero-rated. Keep copies of every VAT invoice you issue and receive, for at least 6 years.
Common mistakes
- Charging VAT without being registered. This isn't allowed. If you've done it, contact HMRC.
- Leaving off the VAT number. Without it, your customer can't reclaim the VAT.
- Showing only a VAT-inclusive total on a full VAT invoice, with no VAT figure.
- Getting the VAT sums wrong on invoices with several lines or rates. The VAT Invoice Calculator checks these.
Frequently asked questions
Can I reclaim VAT with a normal invoice?
Generally no. You need a valid VAT invoice to reclaim VAT. If a supplier sends an invoice without the VAT details, ask them for a VAT invoice.
Do I need a VAT invoice for small purchases?
For purchases of £250 or less from a retailer, a simplified VAT invoice (a detailed receipt) is enough.
Does a VAT invoice have to say "VAT invoice"?
No. It's a VAT invoice because of the details it contains, not its heading. Many businesses still use the heading "VAT invoice" or "Tax invoice" for clarity.
Official source: HMRC VAT guide (VAT Notice 700) and GOV.UK: Invoices - what they must include.