If your business is VAT registered and we want to reclaim the VAT on a purchase, there are rules around the evidence we need to support that claim.
And unfortunately, proof that you paid for something isn’t necessarily the same thing as a valid VAT invoice.
What am I looking for?
For a standard VAT invoice, there are certain pieces of information that should be there.
These include things such as:
- a unique invoice number
- the supplier’s name, address and VAT registration number
- your business name and address
- the invoice date and, where different, the date of supply
- a description of what was supplied
- the amount excluding VAT
- the VAT rate and amount
- the total amount payable
There are some additional requirements depending on the type of transaction, but those are the sorts of things I’m checking when I look at the paperwork you’ve provided.
Most proper invoices from VAT-registered suppliers will contain everything we need without you having to give it a second thought – it’s the other bits of paper that tend to cause trouble.
What about normal shop receipts?
Here’s where it gets a little more interesting.
For purchases of £250 or less including VAT, a supplier can issue a simplified VAT invoice that doesn’t need all of the information you’d expect to see on a full VAT invoice.
It should still contain key details, including the supplier’s name, address and VAT registration number, the date of supply, enough information to identify what was bought, the total including VAT and the applicable VAT rate.
That’s why an ordinary-looking till receipt can sometimes be perfectly good evidence for reclaiming VAT.
The card machine slip isn’t enough
That little piece of paper saying:
**APPROVED
£68.40
VISA **1234
proves that a payment happened.
It doesn’t tell me what you bought, who actually supplied it, whether the supplier is VAT registered or how much VAT was charged.
The same applies to a screenshot of your online order showing the payment. They’re useful evidence that money changed hands, but they won’t satisfy HMRC if they ask us to show why the VAT was reclaimed.
Beware of official-looking bits of paper
This is a particularly common one if you buy from builders’ merchants, electrical wholesalers, plumbing suppliers or trade counters.
You collect your order and you’re handed a piece of paper with it. It might list everything you’ve bought, include pricing, and it might even show VAT. It certainly looks like the sort of paperwork your bookkeeper has been nagging you to keep.
But if you pay closer attention, it might be headed:
Advice Note
Delivery Note
Collection Note
Despatch Note
Picking Note
Those documents can be useful, but they’re not a VAT Invoice.
They’re often given to you to confirm what was supplied or collected. The actual VAT invoice is often produced separately, emailed to you, added to your online trade account or included in your monthly account paperwork.
So please keep the pink slip if that’s what you’re handed, but don’t be surprised if I come back and ask you for the invoice as well.
And watch out for pro-forma invoices
A ‘pro-forma’ invoice can look remarkably like a proper invoice.
It might have the supplier’s details, a description, VAT and a nice big total at the bottom, but if it’s marked “pro-forma” or “this is not a tax invoice”, it isn’t the VAT invoice I need to support the claim.
Once you’ve paid, the supplier should usually be able to provide the proper VAT invoice.
Why am I being so picky?
Because if I reclaim VAT on your behalf, there needs to be appropriate evidence behind that claim.
HMRC’s starting point is that input VAT claims should be supported by a valid VAT invoice. There are circumstances where HMRC may consider alternative evidence, but that’s discretionary and intended for exceptional situations – it isn’t a replacement for keeping proper VAT invoices.
So if I come back to you and say:
“Sorry, I need the VAT invoice for this one”
I’m not rejecting perfectly good paperwork for the fun of it.
What you’ve sent may prove that you spent the money – it just might not prove that we’re entitled to reclaim the VAT.
