VAT and Sales Invoicing

Unless your supplies are zero-rated or outside the scope of VAT (eg veterinary services, welfare services) all sales invoices raised on a UK client should include VAT.

If your company is invoicing a foreign client (eg a Dutch or an Irish Company) then no VAT is applicable. All receipts from clients should of course be covered with a sales invoice. There are no exceptions – so whether the receipt is for work carried out, reimbursed expenses, car mileage allowance etc etc all company sales/receipts must have a VAT invoice.When recovering expenses from a client you should not charge VAT on top of VAT eg if you have incurred a cost of £100 plus VAT = £120, the total of your sales invoice should be exactly the same (£100 plus VAT) – and not £120 plus VAT.

Failure to recover VAT from clients will lead to you being responsible to HMRC for payment when they come out to inspect your records – they also regularly impose a fine on top of this.


By graeme on May 6, 2011

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