Regular readers of our VAT blog will recall our recent article on “How to create a Compliant VAT Invoice”. In this article we will take a look at the circumstances in which it may be appropriate to issue simplified and modified VAT invoices to customers, and how these differ from a standard VAT invoice.
Since 1 January 2013 any business making a supply for £250 or less (including VAT) can issue a simplified invoice to their customer. Simplified invoices contain less information than is required on a full VAT invoice.
A simplified invoice need only include the following details:
- The name, address and registration number of the supplier
- The time of the supply (tax point)
- A description sufficient to identify the goods or services supplied
- The total amount payable including VAT
- For each rate of VAT charged, the gross amount payable including VAT and the VAT rate applicable.
VAT exempt supplies must not be included in this type of invoice. Also they cannot be issued to customers in other EU Member States.
Retailers are not required to issue a VAT invoice unless a customer requests one. If a customer asks for an invoice then the retailer has the following options:
- Provided the supply does not exceed £250 (including VAT) a less detailed VAT invoice can be issued. Less detailed VAT invoices need only contain the same information as outlined above for simplified invoices. VAT exempt supplies must not be included on the invoice and as with simplified invoices they cannot be issued for sales to customers from another EU Member State.
- Provided the customer agrees a modified VAT invoice can be issued showing the VAT inclusive values of each Standard-rated or Reduced-rated supply instead of the VAT exclusive amounts.
The following information must also be shown separately at the foot of the invoice:
- the total VAT-inclusive value of the standard rated or reduced rate supplies
- the total VAT payable on those supplies shown in sterling
- the total value, excluding VAT, of those supplies
- the total value of any zero-rated supplies included on the invoice
- the total value of any exempt supplies included on the invoice
In all other respects the invoice should show the details required for a full VAT invoice.
If the retailer is asked for a VAT invoice, but is unable to use either of these options, then a full VAT invoice must be issued to the customer.
As you can see there are therefore situations where different types of invoices can or must be issued. You can download a free guide to the type of information needed to be present on different types of invoice by clicking on the button below.
Also, look out for our forthcoming article on the requirements for invoices issued to customers in other EU Member States.