What makes an invoice valid

No invoice is required for Notice April , para These are concessions by HMRC. No excuses are accepted in other cases because of the problem of whether the supplier is registered. That apart, the rule is no tax invoice, no VAT recovery! Must the tax invoice be in my name? A tax invoice is supposed to show the person to whom the goods or services are supplied. So, if an invoice is not in your name, it usually means that the supply was not to you. In principle therefore, you should not recover VAT on invoices in the name of third parties.

HMRC will sometimes allow this in circumstances in which they are sure that there was a supply made to the person claiming the input VAT and that that VAT has not already been claimed by the party to which the invoice was addressed. However, it is far better to obtain an invoice in the right name in the first place. The one common exception to that requirement is expenses incurred by employees. Whilst it is always a good idea to obtain an invoice addressed to the employer if possible for, say, hotel accommodation, HMRC do not insist on this.

Naturally, the travel must be on business. When part of an expense, such as business calls on a private telephone bill, is paid by an employer, HMRC will allow recovery of the appropriate proportion of VAT provided, of course, that you obtain a copy of the bill in question. What if I fail to get a tax invoice? Usually, the solution is to ask the supplier for one or for a copy if the original has been lost and, for routine transactions, HMRC are likely to insist on this.

The extent to which your business is at risk for failure to obtain tax invoices must depend upon how many suppliers it has, whether it deals with relatively few of them frequently or infrequently, with a large number of different ones and soon. HMRC have power to allow electronic invoicing, which assists those suppliers whose systems are closely integrated with those of customers.

The rules have been around since long before the internet, although no doubt this is encouraging the transmission of documentation electronically.

If you just use the internet instead of the post and you print the invoices from your suppliers off your computer, HMRC may, in theory, have little concern. However, it might be wise to discuss the matter with them if only because of the risk that two copies of the document might be printed, without this being apparent. Issuing tax invoices electronically HMRC allow unsigned fax or e-mail invoices. If you start to invoice electronically, you must tell HMRC within 30 days. Systems for invoicing with a computer range from merely producing the document, which is sent by post, to a full-blown electronic data interchange system, known as EDI.

Before installing the latter, you must get approval from HMRC. It is wise in any case to consult them when developing a new computer system of any kind because they may have useful comments to make about its design, quite apart from the risk that you fail to take care of some VATpoint.

One point to consider is the control on duplicate invoices. Cheap modern printers mean that it is possible to print off a copy of an invoice without there being any indication that it is a copy. When planning a computer specification consider a requirement that the second or subsequent copies of a document are overprinted stating that they are a copy with the date of printing.

The author does not know what is due until told by the publisher. Dangers of self-billing The pitfall of self-billing is that, if you, the customer, do not do it properly, HMRC may either disallow the input tax, which you have invoiced to yourself from your supplier or may demand from you extra VAT if the value was too low. How do you grow your social following and maintain interest?

Read more. As with all businesses we're trying to keep things going and as such it's business as usual at VABS during the Covid outbreak. We regularly work from home so were quickly set up in our home offices where we're trying hard to keep on top of the guidance and legislation changes so we have the latest information for our clients.

We recognise this is a very testing time for everyone, businesses in particular. Our team are available to help you wade through the official guidance, prepare essential cashflow forecasts or renegotiate supplier contracts and arrange payment plans with your suppliers.

Of course we're always available for brainstorming sessions to help you plan , get clarity and focus on what you can do short, medium and long term. Any Glasgow business eligible for the Coronavirus Business Support Fund can apply through the link below. September 2, Answerthirst Editor 0 How many hours should a part time student work? September 2, Answerthirst Editor 0 What is the rule for ible and able?

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