Yes, if you're VAT registered and your customer is a VAT-registered business. A pro forma isn't a VAT invoice, so once the customer pays you issue a full VAT invoice, normally within 30 days of receiving the payment. The payment date is usually the tax point for the amount received, so the VAT goes into the return for that period, even if you haven't done the work yet.
In this article
The short version
- If you're VAT registered and your customer is too, a paid pro forma needs a full VAT invoice.
- HMRC expects that VAT invoice within 30 days of receiving the payment.
- A payment before you supply usually creates a tax point for the amount received.
- Most deposits create a tax point when received; refundable security deposits don't.
- If you aren't VAT registered, send an ordinary invoice with no VAT.
Why the pro forma doesn't count
HMRC treats a pro forma as a document that sets out what you'll supply if you're paid, not a record of a sale. It's not acceptable evidence for your customer to reclaim VAT, even if it shows VAT on every line. HMRC suggests marking pro formas "This is not a VAT invoice" for that reason.
So the VAT invoice is still owed. You must issue one whenever you make a standard-rated or reduced-rated supply to another VAT-registered business, and when you've been paid against a pro forma, HMRC expects the full VAT invoice within 30 days of receiving the payment. Until it arrives, your customer has paid you VAT they can't claim back, and many finance teams will chase you for it.
If your customer isn't VAT registered, such as a consumer, there's no requirement for a VAT invoice. Most businesses still send an invoice or receipt so the customer has a record of what they paid for.
If you aren't VAT registered yourself, none of this applies. Only VAT-registered businesses can issue VAT invoices, and your pro forma and final invoice shouldn't show VAT at all.
When the VAT is due on an advance payment
VAT is due by reference to the tax point. For services, the basic tax point is when the service is performed, and for goods it's usually when they're sent or collected. If you're paid before that, the date you receive the payment becomes the tax point for the amount received.
You'll account for the VAT in the return for the period the payment lands in, not the period you do the work. Say a customer pays a pro forma for £3,000 plus £600 VAT on 25 March, and you deliver in April. If your VAT quarter ends on 31 March, the £600 belongs in the March quarter, and the VAT invoice you issue should show the payment date as the time of supply.
Preparing the pro forma doesn't create a tax point. Only the payment does, or the issue of a VAT invoice if that comes first. So a pro forma that's never paid has no VAT consequence.
If you're on the VAT Cash Accounting Scheme, you account for VAT on sales when the customer pays anyway, so a paid pro forma ends up in the same period. You still issue the VAT invoice within 30 days.
Deposits, part payments and the balance
Most deposits count as advance payments. When you receive one, it creates a tax point for the amount of the deposit, and the VAT invoice you issue covers that amount. The balance gets its own tax point under the normal rules, usually when you supply or invoice it.
A refundable security deposit is different. If the money is held to cover damage or loss and is returned or forfeited, it isn't payment for the supply and doesn't create a tax point.
A part payment against a pro forma works like a deposit. The tax point covers what you received, not the full pro forma total, and you account for VAT on the rest when it's paid or supplied.
Accountants often have a view on how deposit invoices should be laid out. If you take deposits regularly, agree a format with yours, so each VAT invoice clearly shows what it covers.
How to make sure the VAT invoice goes out
The VAT invoice is easy to forget, because the money has already arrived and the job feels done. Two habits help. Keep a list of paid pro formas still waiting for an invoice and clear it weekly, well inside the 30 days. And take payment in a way that tells you it's arrived, such as a payment link, so you're not relying on spotting a transfer in the bank.
In Adfin, a pro forma is sent as a payment request with your products and services listed and an estimated tax breakdown. When the customer pays, automatic tax invoices create the tax invoice as a PDF with the tax details, send it to your customer and sync it to Xero or QuickBooks. You don't need to raise the VAT invoice by hand, and your books show it without a separate entry. Unpaid requests can be followed up by Adfin's collection agents, within rules you approve.
This article explains HMRC's published guidance and isn't tax advice. Check how deposits and advance payments should appear in your returns with your accountant.
Related guides
- VAT invoices: what UK businesses must show
- Do you pay VAT on invoices that haven't been paid yet?
- How to set VAT aside from customer payments
- Invoicing for UK businesses: a complete guide
Common questions
How long do I have to issue a VAT invoice after a pro forma is paid? HMRC expects the full VAT invoice within 30 days of receiving the payment.
Can my customer reclaim VAT using the pro forma? No. A pro forma isn't acceptable evidence for reclaiming VAT, so your customer needs the full VAT invoice.
What's the tax point when a customer pays upfront? The date you receive the payment is normally the tax point for the amount received, if it comes before you supply the goods or services.
Does a deposit create a tax point? Most deposits are advance payments and create a tax point when received. A refundable security deposit doesn't.
Do I need a VAT invoice if my customer isn't VAT registered? There's no requirement to issue one to a customer who isn't VAT registered, though most businesses send an invoice or receipt anyway.
I'm not VAT registered. What do I send after a pro forma is paid? An ordinary invoice with no VAT on it. Only VAT-registered businesses can issue VAT invoices.
Sources
- HMRC - VAT guide (VAT Notice 700) (accurate as of November 2026) https://www.gov.uk/guidance/vat-guide-notice-700
- HMRC - Record keeping for VAT (VAT Notice 700/21) (accurate as of November 2026) https://www.gov.uk/guidance/record-keeping-for-vat-notice-70021
- HMRC - VAT Trader Records Manual: can a pro-forma invoice be used to account for VAT (VATREC9020) (accurate as of November 2026) https://www.gov.uk/hmrc-internal-manuals/vat-trader-records/vatrec9020
- GOV.UK - VAT Cash Accounting Scheme (accurate as of November 2026) https://www.gov.uk/vat-cash-accounting-scheme
- Adfin - Changelog: product updates (accurate as of November 2026) https://www.adfin.com/resources/changelog
