Two incredibly important points to note:-
- VAT invoices must be complete if you’re looking to rely on them to recover input VAT; and
- Invoices can be corrected before, but not after HMRC has made a decision as to their validity.
Sounds very simple, but one straightforward case highlights that this is not always so.
In the summer of 2013 the Court of Justice of the EU released its judgement in the case of Petroma Transports SA et al. (C-271/12). Here Belgian tax authorities determined that VAT invoices provided to support a VAT recovery were incomplete and insufficient owing to the fact that they did not include unit prices. Further, the tax authorities insisted that supplementary support for the inadequate invoices did not compel the VAT authority to allow the input tax recovery as the invoices were inadequate at the time the invoices were assessed for validity by the tax authorities (i.e. at the time of the compliance visit).
VAT notice 700/21 sets out the information that must be included on a complete VAT invoice:-
- a sequential number based on one or more series which uniquely identifies the document
- the time of the supply
- the date of issue of the document (where different to the time of supply)
- the name, address and VAT registration number of the supplier
- the name and address of the person to whom the goods or services are supplied
- a description sufficient to identify the goods or services supplied
- for each description, the quantity of the goods or the extent of the services, and the rate of VAT and the amount payable, excluding VAT, expressed in any currency
- the gross total amount payable, excluding VAT, expressed in any currency
- the rate of any cash discount offered
- the total amount of VAT chargeable, expressed in sterling
- the unit price
- the reason for any zero rate of exemption
Special rules apply to invoices issued under a margin scheme or subject to a reverse charge and you need to follow the rules in the relevant notices for such supplies.
It is imperative that invoices are reviewed for completeness at the time they are received as it is clear that taxpayers cannot necessarily rely on the goodwill of HMRC in allowing inadequate invoices to be amended or supplemented during or after the compliance visit.
Contacts – VAT
Justin Moore – firstname.lastname@example.org
Tim Straw – email@example.com
Claire Nilsson – firstname.lastname@example.org
or please telephone us on 020 7306 9100.