As from 1st of October 2007 there were changes made to what information you need to include on a VAT invoice. If you don’t comply then HM Revenue and Customs can hit you with pretty massive fines.
Although fines are unlikely to be levied for non compliance in the first year, business owners cannot be complacent. If you don’t check that your invoices comply with the new regulations next time you get a VAT inspection you are likely to be hammered for a large penalty. Now is the time to check things out.
Who does this affect?
The new regulations apply to tall VAT registered traders and it is probable that most businesses will already comply. Those most likely to be affected are:
- businesses who do not presently operate a sequential sales invoice number system
- businesses using the margin scheme for second-hand goods, works of art, antiques and collector’s items
- businesses involved in making travel related supplies that fall within the scope of the Tour Operators Margin Scheme
- businesses involved in intra EC supplies of goods and services, and
- businesses making supplies where the customer accounts for the VAT
What do the new regulations require?
- Invoice numbering – all VAT registered businesses should now sequentially number their sales invoices.
- Second hand margin scheme – if you use this VAT scheme you should note this fact on your sales invoice. I suggest you add the following line to your invoice: “This invoice is for a supply covered by the VAT second-hand margin scheme.”
- Tour operators margin scheme – if you use this VAT scheme you should note this fact on your sales invoice. I suggest you add the following line to your invoice: “This invoice is for a supply covered by the VAT tour operators’ margin scheme.”
- Cross border EC supplies – if you make such a supply, which would be exempt if supplied in the UK or subject to the reverse charge provisions, you will need to make an appropriate note on your invoice. As this is a more complex area I suggest you call your accountant or contact me by email if you would like help with the compliance aspects of the relevant invoicing changes.
- Intra EC supplies of goods – these supplies tend to be zero rated for VAT in the UK. A simple statement to include on your invoices could read: “Intra-community supply, subject to VAT in the country of acquisition.”
So, check you comply now and don’t risk a fine somewhere down the line.
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