How can a business provide evidence to VAT registered customers for the VAT? They’ve been charged?
The supply must send or give to the purchaser a VAT invoice within 30 days of the earlier of supply of goods or receipt of payment
When a VAT invoice is not required
If the customer is not VAT registered, if the supply is wholly zero rated or exempt, where the seller is a retailer and is a free sample of something that is usually subject to VAT
A VAT invoice does not have to include items such as
Customers order number date of order customers VAT registration number method of delivery
Businesses can issue an invoice with fewer details on them if…
If the value of the supply is below a certain limit(250 including VAT)
What are the main differences between a simplified invoice and a full invoice?
The customers name address can be missed out. An invoice number is not essential and the total on the invoice includes the VAT without the VAT being shown separately.
What is a modified invoice?
A type of VAT invoice that includes a total price of the products and or services inclusive for VAT
What does a modified VAT invoice show
The same details as a full VAT invoice with the exception as showing the VAT inclusive amounts for each product or service supplied
When a modified invoices issued
 only on products or services with the total amount over 250
 regarding retention of invoices all businesses must keep records of
All sales invoices included except copies of simplified VAT invoices for items under 250 including VAT
All purchased invoices for items purchased for business purposes unless the gross value of the supply is £25 including VAT or less
How can I trade a deal with prompt payment discounts regarding a VAT?
Invoice the customer for the full amount and charge VAT on the full amount and then issue a credit note of the discount and VAT
Invoice for the full amount plus VAT but include the invoice information about the discounted amount plus VAT, the customer knows how much to pay if payment is made within the discount period
What information does the credit note have?
Similar information on the original invoice it must be labelled as credit note
What is the credit note say if they supply issues it without making a VAT adjustment?
This is not a credit note for VAT
Can a supplier issue a credit note to recover irrecoverable debt?
No
What happens to VAT on a credit note from the suppliers point of view?
 the VAT on the credit note issued must be deducted from the output VAT payable
What happens to VAT on a credit note from the customers point of view?
VAT on the credit note receive must be deducted from the input tax recoverable
If a customer return,s goods they can wait for
The supplier to re-issue a corrected invoice or the supplier to issue them with a credit note or they can issue a debit note to the supplier
What happens from the suppliers point of view when a debit nose received from a customer?
The VAT must be deducted from the output tax payable
From the customers point of view, a debit note issued must be deducted …
The VAT must be deducted from their input tax recoverable
Why is a business unlikely to issue a tax invoice before goods are dispatched?
When a business issues a sales invoice that includes VAT the VAT becomes payable to HMRC next time the business submit a return, causing cash flow problems
Why is a pro forma invoice produced?
For goods and service is not yet supplied which essentially is an offer to supply goods and services and a request for payment
When is a live tax invoice issued to replace the pro forma?
When the customer accepts the goods or services offered and the payment is received
Why does a pro-form invoice temporarily stop VAT
Because a pro forma invoice does not rank as a VAT invoice the supplier is not required to pay VAT to HMRC until the live invoices issued
Can customers claim VAT on a pro forma invoice?
No, they must wait until the valid VAT invoice is received
What documents should be entered into VAT records?
Invoice and credit notes
