VAT Invoice Guide: Requirements, Rates and Reverse Charge
What a VAT invoice must show, when a simplified invoice is allowed, and how reverse charge works for cross-border B2B services.
Important: Tax laws, rates, registration requirements, and invoicing rules can change and may vary by jurisdiction. This article provides general informational content and should not be considered professional tax, accounting, or legal advice. Verify current requirements with the relevant tax authority or a qualified professional.
Full VAT invoice
A full VAT invoice is the document that supports VAT reclaim for the customer and correct reporting for the supplier. Exact field lists differ by country, but a full invoice commonly shows:
- Your name, address, and VAT registration number
- Customer name and address (and VAT number for many B2B / cross-border cases)
- A unique sequential invoice number
- Invoice date and the tax point / supply date when different
- Description of goods or services per line
- Net amount per VAT rate, the rate applied, and the VAT amount
- Total net, total VAT, and gross total
Unit prices and quantities should be clear enough that an auditor can reconstruct the totals. If you issue invoices in a foreign currency, follow local rules for showing exchange rates or VAT in the domestic currency when required.
Simplified invoices
Many jurisdictions allow a simplified VAT invoice below a value threshold, typically showing less detail, such as the gross amount and the VAT rate rather than a full buyer-address block. Retail till receipts often rely on these rules.
Check your local threshold and content list before relying on a simplified form for B2B work. Business customers frequently still ask for a full invoice even when a simplified one would be legally allowed, because their reclaim process expects more detail.
Reverse charge
For many cross-border B2B services, the customer accounts for VAT instead of the supplier. In those cases you generally:
- Charge zero VAT on the face of the invoice
- Show the customer's VAT number
- Add clear wording such as "Reverse charge: customer to account for VAT to HMRC/local authority"
- Still keep a full audit trail of the supply
Reverse charge is easy to get wrong when you mix domestic and foreign customers in one template. Train whoever invoices to select the correct tax treatment deliberately, not by habit. Related reading: tax invoice guide and, for GST-style systems, GST invoice guide.
Mixed rates
Subtotal by rate. Show standard-rated, reduced-rated, zero-rated, and exempt lines separately, each with its own VAT amount (zero where appropriate). Blending rates into one percentage confuses filings and reclaim.
When a discount applies across mixed-rate goods, allocate it in line with local rules (often proportionally by net value per rate) rather than knocking an arbitrary amount off the final gross.
Credit notes
To correct a VAT invoice, issue a credit note referencing the original invoice number. Show the adjustment to net and VAT clearly. Never amend and resend the original as if it were untouched; parallel versions of "the same number" create nightmares in audits and customer AP systems.
If you under-billed VAT, get advice before issuing a further charge, as timing and return corrections may be involved.
Time of supply and deposits
VAT timing can follow invoice date, payment date, or supply date depending on local time-of-supply rules. Deposits may create a tax point before final delivery. Align your invoicing rhythm with how your VAT returns are prepared so you do not accidentally pull liability into the wrong period.
Practical compliance habits
- Keep VAT numbers on client records and validate them when tools or official checkers are available.
- Use continuous numbering without unexplained gaps.
- Store PDFs for the statutory retention period.
- Separate VAT collected from cash available to spend.
- Review mixed-rate and reverse-charge invoices manually until error rates are near zero.
International services and goods
Place-of-supply rules differ for services and goods, and distance-selling / one-stop-shop style regimes may apply to certain B2C sales. Do not copy a domestic invoice format onto a foreign customer without checking whether reverse charge, zero rating, or local registration obligations apply.
State currency clearly and note who bears bank transfer fees so the net amount you receive matches expectations.
Domestic B2B habits that prevent reclaim friction
Even when a simplified invoice would be allowed, many business customers ask for full detail because their reclaim workflow expects it. Defaulting to full VAT invoices for B2B saves negotiation. Include the customer VAT number when you have it; missing numbers are a frequent cause of queries even when not strictly mandatory for every domestic case.
Keep your own VAT number identically formatted on every PDF. Inconsistent spacing or omitted country prefixes confuse automated capture tools some buyers use.
Goods versus services on the same invoice
When a job mixes goods and services with different place-of-supply outcomes, split lines carefully and document treatment in notes. Dumping everything into one undifferentiated service line is how reverse-charge and domestic VAT get mixed incorrectly.
Shipping and postage may follow special rules depending on whether they are incidental to goods. If unsure, separate them and seek advice rather than inventing a blended rate.
Year-end hygiene
Before year end, review open credit notes, orphaned invoices, and foreign customers billed with domestic VAT by mistake. Clean documents make accountant reviews faster and reduce surprise assessments. Retain evidence of VAT number checks for cross-border B2B where your process requires it.
Across the EU, VAT invoices are steadily becoming structured e-invoices. See the Belgium and Poland (KSeF) mandates and the German XRechnung rules for two current examples.
Build the document, then verify
Build the document in the invoice generator, use an AP-friendly layout such as Corporate or Modern, and confirm details with your accountant before you rely on a format for reclaim or return filing. See also our About page and Disclaimer.
This article is general information, not tax advice. Rules change; your registration status and trade pattern determine what you must show.
Frequently asked questions
When do I have to register for VAT in the UK?
You must register for VAT when your VAT-taxable turnover goes over £90,000 in a rolling 12-month period, or you expect it to exceed that in the next 30 days alone. That threshold has applied since 1 April 2024. You can also register voluntarily below it. Thresholds change, so check HMRC's current guidance before deciding.
How quickly must I issue a VAT invoice?
In the UK, you generally need to issue a VAT invoice within 30 days of the date of supply, or of payment if you were paid in advance. In the EU, rules differ by country, and invoices for cross-border supplies to other member states are commonly due by the 15th day of the following month. Check your local tax authority's rules.
What is the UK limit for a simplified VAT invoice?
In the UK, you can generally issue a simplified VAT invoice for retail supplies of £250 or less including VAT. It still needs your name, address and VAT number, the time of supply, a description and the VAT rate, but not the customer's details. If the customer asks for a full VAT invoice, you should provide one.
Can I issue a UK VAT invoice in euros or dollars?
Yes, you can invoice in any currency. However, where UK VAT is charged, the invoice must show the total net value and the VAT amount at each rate in pounds sterling. You can use the exchange rate at the time of supply or HMRC's published period rates. Note which rate you used so your records can be checked.
How do I check a customer's VAT number?
For EU VAT numbers, use the European Commission's VIES service, which confirms whether a number is valid for cross-border trade. For UK VAT numbers, use HMRC's online VAT number checker. Save the result, with the date, in the client file. This evidence matters when you apply reverse charge and charge no VAT on cross-border B2B supplies.
Do I need to give a VAT invoice to customers who are not VAT registered?
In the UK, you generally do not have to issue a VAT invoice to customers who are not VAT registered, such as members of the public, though you can still give them one or a receipt. They cannot reclaim the VAT anyway. Rules in EU countries vary, and some require invoices for certain consumer sales, so check locally.
What is the difference between zero-rated and exempt supplies?
Both carry no VAT on the invoice, but they are treated differently. Zero-rated supplies are taxable at 0%, so they count towards your VAT turnover and you can usually reclaim VAT on related costs. Exempt supplies are outside the VAT charge, and you generally cannot reclaim the related input VAT. Label each one clearly on the invoice.
Does the domestic reverse charge apply to UK construction work?
Yes. Since 1 March 2021, the UK domestic reverse charge applies to many building and construction services reported under the Construction Industry Scheme, between VAT-registered businesses. The supplier shows the VAT rate and amount but does not charge it, and adds wording stating that the customer must account for the VAT to HMRC. End users are excluded, so check HMRC's guidance.
How long must I keep VAT invoices?
In the UK, you must generally keep VAT records, including copies of invoices, for at least six years. Other countries set their own periods, often between five and ten years, and some require longer for property. Store digital copies securely with backups, and keep them readable even if you change accounting software.
Is a PDF VAT invoice still acceptable?
In the UK, a PDF sent by email is generally acceptable as a VAT invoice. Across the EU, more countries now require structured e-invoices for B2B sales, and an EU reform package called VAT in the Digital Age will add digital reporting for cross-border trade. Our generator creates PDF invoices, not structured e-invoices, so check whether a mandate applies to you.
Invoice Creator Editorial Team
Guides on invoicing, cash flow and small-business finance from Invoice Creator, operated by Next Software Development Company. Content is reviewed for accuracy against the fields our own invoice generator produces.
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