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E4: VAT invoicing and credit notes
Obligation to provide a VAT invoice
"(1) Save as otherwise provided in these Regulations, where a registered person—
(a) makes a taxable supply in the United Kingdom to a taxable person, or
(b) makes a supply of goods or services to a person in another member State for the purpose of any business activity carried out by that person, or
(c) receives a payment on account in respect of a supply he has made or intends to make from a person in another member State,
he shall provide such persons as are mentioned above with a VAT invoice (unless, in the case of that supply, he is entitled to issue and issues a VAT invoice pursuant to section 18C(1)(e) of the Act and regulation 145D(1) below in relation to the supply by him of specified services performed on or in relation to goods while those goods are subject to a fiscal or other warehousing regime)" (SI 1995/2518, r.13(1))
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Sale by creditor at auction
"(2) The particulars of the VAT chargeable on a supply of goods described in paragraph 7 of Schedule 4 to the Act shall be provided, on a sale by auction, by the auctioneer, and, where the sale is otherwise than by auction, by the person selling the goods, on a document containing the particulars prescribed in regulation 14(1); and such a document issued to the buyer shall be treated for the purposes of paragraph (1)(a) above as a VAT invoice provided by the person by whom the goods are deemed to be supplied in accordance with the said paragraph 7." (SI 1995/2518, r.13(2))
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Builder receipt treated as invoice
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"(4) Where the person who makes a supply to which regulation 93 relates gives an authenticated receipt containing the particulars required under regulation 14(1) to be specified in a VAT invoice in respect of that supply, that document shall be treated as the VAT invoice required to be provided under paragraph (1)(a) above on condition that no VAT invoice or similar document which was intended to be or could be construed as being a VAT invoice for the supply to which the receipt relates is issued." (SI 1995/2518, r.13(4))
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Exceptions to obligation to provide invoice (zero-rated, no consideration etc.)
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"Regulations 13, 14, 15, 16, 17, 18 and 19 shall not apply to the following supplies made in the United Kingdom—
(a) any zero-rated supply other than a supply for the purposes of an acquisition in another member State,
(b) any supply to which an order made under section 25(7) of the Act applies,
(c) any supply on which VAT is charged although it is not made for consideration, or
(d) any supply to which an order made under section 32 of the Act applies." (SI 1995/2518, r.20)
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Right of customer to sue for provision of VAT invoice
No statutory right to sue
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[107] I therefore conclude that VATA and the statutory regulations do not create a general statutory duty to provide a VAT invoice enforceable at the behest of an individual customer. That is the general position in law and there is no case for an argument that the facts of this (or any) particular case give rise to such a duty on an individual basis. The answer to Issue 1 is therefore: No, there is and was no such actionable statutory duty." (Claimants in the Royal Mail Group Litigation v. Royal Mail Group Ltd [2020] EWHC 97 (Ch), Mann J)
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No implied contractual right if customer and supplier thought supply was exempt
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"[164]...If one imagines a dialogue (which of course one does not do where the officious bystander is concerned) Royal Mail would doubtless counter a suggestion that it should render a VAT invoice with a suggestion that the customer might like to pay the VAT that no-one was thought was due, as an adjunct to the agreed price. That demonstrates the non-obviousness of the proposed implied term. It would introduce a degree of commercial incoherence which an implied term is supposed to remove, not create - see Lord Neuberger's 6th point in Marks and Spencer paragraph 21." (Claimants in the Royal Mail Group Litigation v. Royal Mail Group Ltd [2020] EWHC 97 (Ch), Mann J)
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Retailers not required to provide invoices and may provide simplified invoices
"(1) Subject to paragraph (2) below, a registered person who is a retailer shall not be required to provide a VAT invoice, except that he shall provide such an invoice at the request of a customer who is a taxable person in respect of any supply to him; but, in that event, if, but only if, the consideration for the supply does not exceed £250 and the supply is other than to a person in another member State, the VAT invoice need contain only the following particulars—
(a) the name, address and registration number of the retailer,
(b) the time of the supply,
(c) a description sufficient to identify the goods or services supplied,
(d) the total amount payable including VAT, and
(e) for each rate of VAT chargeable, the gross amount payable including VAT, and the VAT rate applicable.
(2) Where a registered person provides an invoice in accordance with this regulation, the invoice shall not contain any reference to any exempt supply." (SI 1995/2518, r.16)
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Self-billing
Treated as provided by the supplier if conditions met
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"(1) This paragraph applies where a taxable person provides to himself a document (a “self-billed invoice”) that purports to be a VAT invoice in respect of a supply of goods or services to him by another taxable person.
(2) Subject to compliance with such conditions as may be—
(a) prescribed,
(b) specified in a notice published by the Commissioners, or
(c) imposed in a particular case in accordance with regulations,
a self-billed invoice shall be treated as the VAT invoice required by regulations under paragraph 2A above to be provided by the supplier.
(4) For the purposes of section 6(5) and (6) (under which the time of supply can be determined by the subsequent issue of an invoice) a self-billed invoice in relation to which the conditions mentioned in sub-paragraph (2) are complied with shall, subject to compliance with such further conditions as may be prescribed, be treated as issued by the supplier.
In such a case, any notice of election given or request made for the purposes of section 6(5) or (6) by the person providing the self-billed invoice shall be treated for those purposes as given or made by the supplier." (VATA 1994, Sch 11, para 2B(1), (2), (4) see also SI 1995/2518, r.13(3))
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But not for creating an earlier time of supply
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"(3) For the purposes of section 6(4) (under which the time of supply can be determined by the prior issue of an invoice) a self-billed invoice shall not be treated as issued by the supplier." (VATA 1994, Sch 11, para 2B(3))
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Conditions
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"(3A) The following conditions must be complied with if a self-billed invoice is to be treated as a VAT invoice—
(a) it must have been provided pursuant to a prior agreement (“a self-billing agreement”) entered into between the supplier of the goods or services to which it relates and the recipient of the goods or services (“the customer”) and which satisfies the requirements in paragraph (3B);
(b) it must contain the particulars required under regulation 14(1) or (2);
(c) it must relate to a supply or supplies made by a supplier who is a taxable person.
Self-billing agreement
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(3B) A self-billing agreement must—
(a) authorise the customer to produce self-billed invoices in respect of supplies made by the supplier for a specified period;
(b) specify that the supplier will not issue VAT invoices in respect of supplies covered by the agreement;
(c) specify that the supplier will accept each self-billed invoice created by the customer in respect of supplies made to him by the supplier;
(d) specify that the supplier will notify the customer if he ceases to be a taxable person or if he changes his registration number.
(3C) Without prejudice to any term of a self-billing agreement, it shall be treated as having expired when—
(a) the business of the supplier is transferred as a going concern;
(b) the business of the customer is transferred as a going concern;
(c) the supplier ceases to be registered for VAT.
(3D) In addition to the matters set out in paragraph (3B)—
(a) conditions that must be complied with may be set out in a notice published by the Commissioners;
(b) the Commissioners may impose further conditions in particular cases." (SI 1995/2518, r.13(3A) - (3D))
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Not treated as issued by the supplier for certain purposes
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"(3F) For the purposes of the following, a self-billed invoice will not be treated as issued by the supplier (however the supplier may be described in the provision concerned)—
(a) regulation 84(2)(b)(ii);
(b) regulation 85(1)(b);
(c) regulation 85(2);
(d) regulation 86(1);
(e) regulation 86(2)(b);
(f) regulation 86(3);
(g) regulation 88(1)(b);
(h) regulation 89(b)(ii);
(i) regulation 90(1)(b);
(j) regulation 90(2);
(k) regulation 91;
(l) regulation 92(b);
(m) regulation 93(1)(b);
(n) regulation 94B(6)(a)." (SI 1995/2518, r.13(3F))
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Form and content of invoice
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General requirements
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"(1) Subject to paragraph (2) below and regulation 16 and save as the Commissioners may otherwise allow, a registered person providing a VAT invoice in accordance with regulation 13 shall state thereon the following particulars—
(a) a sequential number based on one or more series which uniquely identifies the document,
(b) the time of the supply,
(c) the date of the issue of the document,
(d) the name, address and registration number of the supplier,
(e) the name and address of the person to whom the goods or services are supplied,
(f) …
(g) a description sufficient to identify the goods or services supplied,
(h) 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,
(i) the gross total amount payable, excluding VAT, expressed in any currency,
(j) the rate of any cash discount offered,
(k) …
(l) the total amount of VAT chargeable, expressed in sterling,
(m) the unit price.
(n) where a margin scheme is applied under section 50A or section 53 of the Act, the reference “margin scheme: works of art”, “margin scheme: antiques or collectors' items”, “margin scheme: second-hand goods”, or “margin scheme: tour operators” as appropriate
(o) where a VAT invoice relates in whole or part to a supply where the person supplied is liable to pay the tax, the reference “reverse charge” " (SI 1995/2518, r.14(1))
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Separately identify exempt or zero-rated supplies
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"(4) Where a registered person provides an invoice containing the particulars specified in paragraphs (1) and (3) above, and specifies thereon any goods or services which are the subject of an exempt or zero-rated supply, he shall distinguish on the invoice between the goods or services which are the subject of an exempt, zero-rated or other supply and state separately the gross total amount payable in respect of each supply and rate." (SI 1995/2518, r.14(4))
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Electronic invoice must be accepted by both parties to be valid
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"(1) This regulation applies where a document is provided by a registered person in any electronic format that purports to be a VAT invoice in respect of a supply of goods or services.
(2) The document is not to be treated as the VAT invoice required to be provided by the supplier under regulation 13(1) unless the use of the electronic invoice is accepted by the customer.
(3) When the document is a self-billed invoice that purports to be a VAT invoice, paragraph (2) applies as if the reference to the supplier is to the customer and the reference to the customer is to the supplier.
(4) In this regulation “electronic invoice” means an invoice that contains the particulars required by regulation 14 and which has been issued and received in any electronic format." (SI 1995/2518, r.13A)
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Batches of electronic invoices need not repeat common details
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"(7) Where a registered person provides documents in batches to the same recipient in any electronic format that purport to be VAT invoices in respect of supplies of goods or services made to, or received by, him, as an exception to the requirements in regulation 14(1) and 14(2), details common to each such document need only be stated once for each batch file." (SI 1995/2518, r.14(7))
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Use of foreign language: power to require translation
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"Where a VAT invoice or part of a VAT invoice is in a language other than English the Commissioners may, by notice in writing, require that an English translation of the invoice is provided to them by a person who has received such an invoice in the United Kingdom within 30 days of the date of the notice." (SI 1995/2518, r.13B)
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Hire or letting of motor cars
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"(6) Where a registered person provides a VAT invoice relating in whole or in part to a supply of the letting on hire of a motor car other than for self-drive hire, he shall state on the invoice whether that motor car is a qualifying vehicle under article 7(2A) of the Value Added Tax (Input Tax) Order 1992." (SI 1995/2518, r.14(6))
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Simplified invoice for supplies valued at less than £250
"In any case where the consideration for a supply does not exceed £250 and the supply is other than to a person in another member State, the VAT invoice that a registered person is required to provide need contain only the following particulars—
(a) the name, address and registration number of the supplier;
(b) the time of the supply;
(c) a description sufficient to identify the goods or services supplied;
(d) the total amount payable including VAT; and
(e) for each rate of VAT chargeable, the gross amount payable including VAT, and the VAT rate applicable." (SI 1995/2518, r.16A)
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Delivery notes and similar not to be treated as invoice if they so provide
"(3) Where a taxable supply takes place as described in section 6(2)(c) or section 6(5) of the Act, any consignment or delivery note or similar document or any copy thereof issued by the supplier before the time of supply shall not, notwithstanding that it may contain all the particulars set out in paragraph (1) above, be treated as a VAT invoice provided it is endorsed “This is not a VAT invoice”." (SI 1995/2518, r.14(3))
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Time limit for invoice: usually 30 days
"(5) With the exception of the supplies referred to in paragraph (6), the documents specified in paragraphs (1), (2), (3) and (4) above shall be provided within 30 days of the time when the supply is treated as taking place under section 6 of the Act, or within such longer period as the Commissioners may allow in general or special directions." (SI 1995/2518, r.13(5))
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Certain removals of goods to the EU
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"(6) The documents specified in paragraphs (1), (2), (3) and (4) shall—
(a) in the case of a supply of goods falling within section 6(7) of the Act, be provided by the 15th day of the month following that in which the removal in question takes place;" (SI 1995/2518, r.13(6))
Reverse charge services
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"(6) The documents specified in paragraphs (1), (2), (3) and (4) shall—
[...]
(b) in the case of a supply of services falling within regulation 82, be provided by the 15th day of—
(i) the month following the month in which the services are treated as being performed under regulation 82(2),
(ii) the month following the month during which the services are treated as separately and successively made as a result of payments being made under regulation 82(4), or
(iii) the January following the 31st December on which the services are treated as being supplied under regulation 82(6)." (SI 1995/2518, r.13(6))
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Duty to ensure authenticity and legibility of invoice
"(7) Both the supplier and the customer shall ensure the authenticity of the origin, the integrity of the content and the legibility of an invoice for such time as the invoice is required to be preserved.
(8) In this regulation—
(a) “authenticity of the origin” of an invoice means the assurance of either the identity of the supplier of the underlying goods or services or the issuer of that invoice;
(b) “integrity of the content” of an invoice means that the content required by regulation 14 has not been altered." (SI 1995/2518, r.13(7) - (8))
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Collection of VAT shown on invoice as debt due to the crown
"[79] ... While the FTT in St Martins’ Medical clearly considered that paragraph 5(2) ought to be targeted towards situations in which the VAT system was fraudulently abused, it did not suggest that the actual words of paragraph 5(2) were so limited. On the contrary it specifically noted (at [97]) that paragraph 5(2) was not confined to the type of abuse which the FTT considered was the principal target of the provision. There is nothing in the FTT decision restricting the scope of the initial liability to abusive situations. To the extent the FTT’s decision can be viewed as articulating a possible defence to VAT sought under paragraph 5(2) then that too does not assist in showing the FTT’s decision in [the taxpayer's] case was incompatible with the position that it is argued must be taken to follow from the High Court’s decision [in respect of winding up the supplier on the basis of unpaid VAT on a supply that the FTT decided had not taken place]. As it was possible that a paragraph 5(2) claim (which was not dependent on any transaction having taken place) was raised, and as, for the purposes of this part of the decision, it is assumed the High Court accepted the liability, any defence based on the circumstances being non-abusive must be presumed to have been unsuccessful. It therefore remains the case that the High Court could have accepted the liability without accepting that a transaction took place." (Qolaminejite v. HMRC [2021] UKUT 118 (TCC), Judge Raghavan and Judge Andrew Scott)
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Special regime for investment gold
See SI 1995/2518, rr.31A - 31C.
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Credit notes in general
XX
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Credit notes on change of rate
"Where there is a change in the rate of VAT in force under section 2 or 29A of the Act or in the descriptions of exempt, zero-rated or reduced-rate supplies, and a VAT invoice which relates to a supply in respect of which an election is made under section 88 of the Act was issued before the election was made, the person making the supply shall, within 45 days after any such change, or within such longer period as the Commissioners may allow in general or special directions, provide the person to whom the supply was made with a credit note headed “Credit note-change of VAT rate” and containing the following particulars—
(a) the identifying number and date of issue of the credit note,
(b) the name, address and registration number of the supplier,
(c) the name and address of the person to whom the supply is made,
(d) the identifying number and date of issue of the VAT invoice,
(e) a description sufficient to identify the goods or services supplied, and
(f) the amount being credited in respect of VAT." (SI 1995/2518, r.15)
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