Taking Account

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VAT invoicing changes from 1st October 2008

January 2008

If you are in business and registered for VAT, from 1 October 2007 you are required to add certain information to your sales invoices. However in the first year of the new requirements HMRC will issue penalties for non compliance with the new requirements in exceptional cases only.

Who does this affect?

While the new regulations apply to the whole of the VAT population, 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 collectors 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 is required?

1. Invoice numbering - all VAT registered businesses should now sequentially number their sales invoices.

2. Second hand margin scheme - if you use this VAT scheme you should note this fact on your sales invoice. We suggest you add the following line to your invoice: "This invoice is for a supply covered by the VAT second-hand margin scheme."

3. Tour operators margin scheme - if you use this VAT scheme you should note this fact on your sales invoice. We suggest you add the following line to your invoice: "This invoice is for a supply covered by the VAT tour operators margin scheme."

4. 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 we suggest you call if you would like our help with the compliance aspects of the relevant invoicing changes.

5. 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."

Hilton Sharp & Clarke