A full VAT invoice must show a sequential invoice number, the time of supply, the date of issue, your name, address and VAT number, your customer's name and address, a description, the quantity, unit price, VAT rate and net amount for each line, the total excluding VAT, any cash discount rate and the total VAT in sterling. You normally have 30 days from the supply to issue it, and for supplies of £250 or less you can use a simplified invoice instead.
In this article
The short version
- You must issue a VAT invoice when you sell to another VAT-registered business, normally within 30 days.
- A full VAT invoice shows the VAT rate and net amount for each line and the total VAT in sterling.
- Issue the invoice within 14 days of the basic tax point and the invoice date becomes the tax point.
- Simplified invoices are allowed for supplies of £250 or less, not only for retailers.
When you need to issue a VAT invoice
You must issue a VAT invoice whenever you make a standard-rated or reduced-rated supply to another VAT-registered business. Your customer needs it to reclaim the VAT they've paid you, so a missing or incomplete one tends to come back as a query before it's paid.
You normally have 30 days from the date of the supply to issue it. HMRC can allow longer, but if you finish work in one month and invoice in the next, it's worth knowing that the clock started when the work was done, not when you got round to the paperwork.
You don't need to issue a VAT invoice when:
- your customer isn't VAT registered, such as a consumer
- the invoice only covers exempt or zero-rated supplies
- you're a retailer and a VAT-registered customer hasn't asked for one
Only VAT-registered businesses can issue VAT invoices. If you aren't registered, your invoices mustn't show or charge VAT.
What a full VAT invoice must show
HMRC's list, which comes from regulation 14 of the VAT Regulations 1995, is longer than the one for an ordinary invoice:
| Detail | What to watch |
|---|---|
| A sequential number from one or more series that uniquely identifies the invoice | Separate series for separate companies or branches are allowed; restarting a series isn't |
| The time of supply | This is the tax point, explained below |
| The date of issue, where it's different from the time of supply | Often the same day, but not always |
| Your name, address and VAT registration number | As they appear on your VAT registration |
| Your customer's name and address | The business you're supplying |
| A description that identifies what you supplied | "Consultancy" alone is thin; "Consultancy, 12 hours, September 2026" identifies it |
| For each line, the quantity and the unit price | Per line, not just a total |
| For each line, the VAT rate and the amount excluding VAT | VAT shown by line, not as one lump |
| The total excluding VAT | |
| The rate of any cash discount you offer | Only if you offer one |
| The total VAT | Always in sterling, even if the invoice is priced in another currency |
If the reverse charge or a margin scheme applies, the invoice has to say so as well.
Most VAT invoice problems are small: a name that doesn't match your VAT registration, VAT shown only as a total, or a one-word description your customer's finance team can't match to a purchase order. Each one is easy to fix, and each can turn into a query that holds up payment.
How the tax point and the 14-day rule work
The tax point, or time of supply, decides which VAT return a sale goes in, and it isn't always your invoice date.
The basic tax point is when the goods were sent or made available, or when the service was finished. Two things can move it:
- if your customer pays you, or you issue a VAT invoice, before the basic tax point, the earlier date becomes the tax point
- if you issue the VAT invoice within 14 days after the basic tax point, the invoice date becomes the tax point
The 14-day rule applies automatically unless you've told HMRC in writing that you don't want to use it, and HMRC can agree a longer period if, for example, you invoice monthly. If you miss the 14 days, the basic tax point stands. Around a quarter end, that's how VAT on work finished in March can belong in a quarter ending in March even though you didn't invoice until late April.
When a simplified VAT invoice is enough
For a supply of £250 or less including VAT, you can issue a simplified VAT invoice. It needs:
- your name, address and VAT registration number
- the time of supply
- a description of the goods or services
- the total including VAT, and the VAT rate
It can't include exempt supplies. This isn't only for shops: HMRC's guidance allows simplified invoices for retailers and other businesses alike, as long as the supply is £250 or less. Retailers have one extra concession, in that they only need to provide a VAT invoice when a VAT-registered customer asks for one.
Above £250 you need either a full VAT invoice or a modified one, which shows VAT-inclusive rather than VAT-exclusive amounts. If you mostly bill other businesses, it's often simpler to issue full VAT invoices every time, so you only have one template to keep right.
Once the invoice is right, the work moves to getting it paid. If you raise VAT invoices in Xero or QuickBooks, Adfin collects against them, either with a payment link your customer can pay by card or pay by bank, or by direct debit where they've signed a mandate, and its two-way sync keeps invoices, payments and credit notes matching in both systems. Its AI Customer Agents follow up on overdue invoices on the schedule you set.
Common questions
How long do I have to issue a VAT invoice? Normally 30 days from the date of supply. HMRC can allow longer in some cases.
Do I need to issue a VAT invoice to a consumer? No. You only have to issue one when you supply another VAT-registered business, though you still charge VAT on the sale.
Can any business use a simplified VAT invoice? Yes, for supplies of £250 or less including VAT that don't include exempt items. It isn't limited to retailers.
Does the invoice number have to be sequential? Yes. It must come from one or more series and uniquely identify the invoice, so separate series per company or branch are fine.
What is the 14-day rule? If you issue a VAT invoice within 14 days of the basic tax point, the invoice date becomes the tax point, unless you've told HMRC you don't want to use the rule.
Does the VAT have to be shown in pounds? Yes. The total VAT must be shown in sterling, even if the rest of the invoice uses another currency.
Sources
- HMRC - Record keeping (VAT Notice 700/21) (accurate as of October 2026) https://www.gov.uk/guidance/record-keeping-for-vat-notice-70021
- legislation.gov.uk - The Value Added Tax Regulations 1995, regulation 14 (accurate as of October 2026) https://www.legislation.gov.uk/uksi/1995/2518/regulation/14
- HMRC - VAT guide (VAT Notice 700) (accurate as of October 2026) https://www.gov.uk/guidance/vat-guide-notice-700
- legislation.gov.uk - Value Added Tax Act 1994, section 6 (accurate as of October 2026) https://www.legislation.gov.uk/ukpga/1994/23/section/6
- Adfin - Pricing (accurate as of October 2026) https://www.adfin.com/pricing
