Andrew Needham looks at the circumstances when a business must issue a tax invoice to its customers and what types of invoices are required.
A VAT invoice can only be issued by a VAT registered business and must legally contain certain information, which is detailed in VAT Notice 700/21, section 5. The legislation specifies two types of VAT invoices: less detailed invoices for supplies under £250, and full VAT invoices for supplies over £250. And they are required for standard and reduced rated supplies.
Paper or electronic?
When a business issues a VAT invoice, it must keep a copy of it for six years. Businesses can issue paper or electronic invoices; it is their choice. A business does not have to apply for permission or inform HMRC if it wants to issue electronic invoices.;