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Invoicing changes

Please be aware that since 1 January 2004 some changes have been made to the requirements for VAT invoicing.

Unit price

  • VAT invoices generally must now show the unit price where the invoice applies to countable goodsorservices. For services this could be an hourly rate or fixed price per service. Where the supply cannot be broken down into countable units, the total VAT exclusive price will be the unit price. Therefore, in the case of services, in order to prevent the need for quoting each individual's charge-out rate on every invoice, all work could be split into the separate jobs/assignments (each representing a countable item) and a fee stated. Failure to adopt this approach may require the taxpayer to quote the hourly charge-out rate of each member of staff involved in the job/assignment on the invoice.

Where the Customer Accounts for VAT Due

  • For supplies to EU businesses where VAT is payable by the customer (instead of the supplier), both VAT numbers must be shown and endorsed to indicate the customer's liability to pay the VAT and/or the relevant legislation and the actual amount of VAT payable.

E-invoicing

  • From 1 January 2004, you are required to notify HM Revenue & Customs (HMRC) within 30 days of beginning to issue electronic invoices.
  • Electronic invoicing systems must be VAT compliant (see Notice 700/63). However, it appears HMRC will allow many formats for the issue of invoices as long as the system is deemed secure, although if invoices are issued to customers in other EU member states you will need to check they can receive your particular format of e-invoice.
  • Should you intend to issue both an e-invoice and a paper invoice on a permanent basis (i.e. not a trial period for a new electronic system) for the same supplies, or to the same trading partners, approval from HMRC is required.

Other invoicing rules have been relaxed as follows:

Currency

  • The only amount required on an invoice subject to UK VAT in sterling is the VAT amount itself.

Self-billing

  • Prior approval from HMRC for self-billing is no longer required provided conditions set out in the VAT regulations and VAT notice 700/62 are met.

Simplified retailers' invoices

  • The upper limit for simplified retailers' invoices has been increased to £250 (including VAT).

Go to our team section where you can search for the VAT specialists at your nearest office.

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