A simplified VAT invoice can be used for retail deliveries under £250. All you need to see is: These records must contain the same information about the original VAT invoice, and also: Keep track of your records and use invoice templates. This makes it quick and easy to send future electronic invoices, and it means you don`t have to copy and paste the details every time. This is to ensure that VAT invoices are easy to find when applying or simply to replace lost documents. There should be no confusion as to who the invoice was issued. Although HMRC constantly refers to this as a unique identification number, most people simply call it the unique invoice number or invoice number. Recurring billing: If you provide a recurring service or product, you can issue recurring invoices (for example, subscriptions). If you issue full VAT invoices, they must include all the information in a regular invoice (which we have already described) as well as: There are other types of invoices that can be useful, such as: How did you get ahead? Is something missing? Don`t panic, just add what you need from now on. Or you can let FreshBooks do everything digitally for you. Simply choose a free invoice template and the app will issue VAT invoices directly to your customers. If you are a sole proprietor, the invoice must also include the following: Credit note: They are used to cancel a charge from a previous invoice if you return an item or overcharge a customer. Using invoicing software can speed up this process by automatically adjusting the invoice number, updating customer data, and sending reminders. A VAT invoice is a specific type of invoice that is issued when a sale of a product or service is subject to sales tax and you are registered for VAT.

You must be registered for VAT if your turnover is over £85,000. Make sure you have the correct name and email address of the person responsible for paying the bills. Especially in large companies, it is likely that it will be in a completely different department from your main contact for the project. While it`s not on HMRC`s must-have list, be sure to indicate how your customers can pay you. FreshBooks allows for a wide range of payment methods: online credit card payments, multi-currency agreements, and fast bank deposits are just a few of FreshBooks` payment features that businesses love. Especially because they offer their own customers such value for money – it makes sense to include all your payment options on your bills. If you are a sole proprietor, you must provide your own name and any business name. You must also “provide an address where all legal documents can be delivered to you if you use a business name.” The system ensures that all required information is entered correctly before sending an invoice to your customer. The system also automatically generates invoice numbers to track an order and ensures that there are no repetitions or gaps. Getting it right the first time can make a big difference. Here`s what we`ll cover in this guide to invoice requests: Every invoice you send is a tax document that serves as proof of income, so be sure to register it in case you need to show it to HMRC.

A VAT invoice is an invoice that contains all the VAT information required by HMRC. Only businesses subject to VAT are entitled to issue invoices with VAT. If you operate in the UK and are registered for VAT, HMRC will continue to ask you to provide additional VAT information on your invoices. If necessary, we may disclose to the buyer the information we hold about the transferred business. We do this so that the buyer can comply with his legal obligations. However, we will first consult with the seller to ensure that we do not disclose any confidential information. Here`s an example invoice from the FreeAgent website (they offer free templates to download): VAT invoices must contain all the elements of a VAT exclusive invoice, as well as: According to HMRC`s website, the following information should be included on your invoice/order: The VAT invoices you issue are a very important part of your business records and you will need a copy of each one you issue. Keep the invoice with VAT. Regardless of the size or nature of your business, you will need to provide accurate invoices when exchanging goods and services in the UK. 2021/INVOICE/001: This format follows the same method as above, but also includes the word “INVOICE” so that it can be uniquely identified as an invoice document. This would be useful if you can also create quotes for customers and replace “INVOICE” with “QUOTE”.

2021-001: This includes the year in which the invoice was created and that year`s invoice number. The next invoice number is “2021-002”. You can choose to follow a simplified invoice template in Microsoft Word, via a spreadsheet or invoicing software such as Xero or FreeAgent. The clearer your bill, the easier it is to get paid and maintain a lasting relationship with your customer. *Note: The tax point displayed on your invoices may vary depending on the transaction. For more information on how to identify the tax point for your complete VAT invoices, visit the GOV.UK website. You must use VAT invoices if you and your customer are VAT registered. Accurate and timely invoices allow you and your customers to manage and meet expectations such as prices and delivery times.

Although standard invoices must have an invoice number, pro forma invoices do not require an invoice number because they are considered “draft invoices” or “draft” invoices. As these are not legally binding documents, no invoice number should be indicated. Registering your invoices performs many important functions. There are two main types of invoices in the UK: VAT-free invoices and VAT invoices. The type of invoice you issue to your customers depends on whether or not your business is registered for VAT in the UK. Limited liability companies must indicate their full legal name as it appears on the certificate of incorporation on their invoices. The address and number of your registered limited liability company must also appear on your invoices. You are not required to provide the names of the company`s executives, but if you enter one, you must provide them all. You can add more letters and numbers to the VAT invoice number in different sections of the general code.

For example, your customer`s initials, the date and number of your invoice. It would look like this: PR-051020-123. Your next VAT bill would be number 124, because that`s the next in order. You should also make sure that no prefix is the same. You can provide all the relevant information, but the invoice numbers must clearly comply with these rules. In some cases, you may also ask HMRC to use a different method of calculating VAT for invoices that show transactions in foreign currencies. If you wish to use another method of paying VAT, you must contact HMRC directly. Maybe you`ve never really thought about your bills. You know what`s on an invoice, and after checking off the legal requirements, you thought it was “job done.” What a business registration is depends on the type of business you run. You will still need to keep a VAT account and copies of invoices, but some of the other records may not be normal records in your business. If this is the case, you must keep such a record not only for VAT.

However, some companies also produce additional commercial documents, and these must be kept and submitted to HMRC upon request. Each of your VAT invoices must have a unique and sequential number. Restarting the numbering of your invoices each year can result in invoices numbered identically for different years. Best practice is to set payment terms (such as payment options) and due dates before you bill your customers. This way, you`re more likely to deliver goods and services on time and receive your payment just as quickly. If it`s a large project that requires more money, consider splitting the project into smaller bills to reduce risk. For invoices that show foreign currency transactions, you should always: Essentially, a pro forma invoice should contain most of the details you`d find on a standard invoice, but clearly state that it is a “pro forma” document and exclude an invoice number. The UK`s VAT rules on the format and information to be provided on invoices are broadly in line with the obligations of the EU VAT Directive and its VAT invoice requirements. Only businesses that are subject to VAT can issue VAT invoices, and if you are registered for VAT, you must issue a VAT invoice if you supply goods or services at a standard or reduced rate to another person subject to VAT.

Normally, you must issue a VAT invoice within 30 days of the delivery date. If you are trading internationally, you need to be careful about how you capture the VAT element of the transaction. Actual amounts do not always have to be expressed in pounds sterling. But you need to show how much VAT is due if you deliver to the UK.