VAT Invoice Requirements in 2026: Full, Simplified and Modified Invoices Explained

A VAT invoice is more than a bill. For your customer it's the document that lets them reclaim the VAT you charged, and for HMRC it's the first thing an officer asks to see in a compliance check. Get a detail wrong and your customer's claim can be refused, which quickly becomes your problem. This guide is for UK VAT-registered sole traders, companies and bookkeepers issuing invoices in 2026. It covers every detail HMRC expects, when you can use a shorter simplified or modified invoice, time limits, credit notes, and the move to mandatory e-invoicing from 2029.

Quick answer

If you're VAT registered and sell standard-rated or reduced-rated goods or services to another VAT-registered business, you must give them a VAT invoice, normally within 30 days of the tax point. A full invoice needs 11 details set out in HMRC's VAT Notice 700, including your VAT number, the tax point, the VAT rate on each line and the total VAT in sterling.

• Full VAT invoice: the default for business customers

• Simplified invoice: allowed up to £250 including VAT, if the customer agrees

• Modified invoice: retail sales over £250, showing VAT-inclusive values

• Keep copies of every invoice for at least 6 years

• E-invoicing becomes mandatory for VAT invoices from 2029

When you must issue a VAT invoice

The rule is narrower than many people think. HMRC's VAT guide says you must issue a VAT invoice whenever you supply standard-rated or reduced-rated goods or services to another VAT-registered person. You don't have to issue one for zero-rated sales, and you don't have to issue one to customers who aren't VAT registered.

In practice, most businesses issue VAT invoices to every business customer, because you usually can't tell whether a customer is registered and HMRC says you don't have to check. If someone asks for a VAT invoice, give them one. Retailers can assume no invoice is needed unless the customer asks, but a retailer who refuses a VAT invoice to a taxable person who asks for one can face a financial penalty.

Only VAT-registered businesses can issue VAT invoices. If you're not registered, your invoices must not show VAT or a VAT number, and charging "VAT" you don't owe to HMRC is a serious matter. You have to register once your taxable turnover goes over £90,000 in a rolling 12 months; see our guide to VAT registration.

There are a few situations where a VAT invoice isn't required even for a registered customer:

• your customer runs a self-billing arrangement and raises the invoice for you
• you use authenticated receipts in construction instead of invoices
• you give away goods on which VAT is due as a business gift
• you sell goods under a second-hand margin scheme — here you must not issue a VAT invoice at all
• the invoice is only for zero-rated or exempt sales within the UK

What a full VAT invoice must include

VAT Notice 700 paragraph 16.3 lists the details. Most accounting and invoicing software produces them automatically, but it's worth checking a template line by line, especially if you built it yourself in a word processor.

The 11 details on a full VAT invoice

0/11

• A unique sequential invoice number (one or more series)
• The time of supply (tax point)
• The date of issue, if different from the tax point
• Your name, address and VAT registration number
• Your customer's name and address
• A description that identifies the goods or services
• For each line: quantity or extent, VAT rate and net amount (any currency)
• The total net amount payable, excluding VAT (any currency)
• The rate of any cash discount offered
• The total VAT charged, shown in sterling
• The unit price, where the goods or services are countable

Share Print

A few of these trip people up. The invoice number must be unique and sequential, but you can run more than one series — for example one per branch or one for credit notes — as long as each number identifies a single document. Gaps and duplicates are exactly what an HMRC officer looks for, so don't reuse a number when you cancel an invoice; keep the cancelled copy.

You can trade under a trading name, but the name and address under which you're registered for VAT must appear somewhere on the invoice. The unit price applies to countable goods and services, such as an hourly rate or a fixed price for a standard job. If a supply can't be broken down, the total net price is the unit price, and you don't need to show it at all if it isn't normal in your sector and the customer doesn't need it.

Line values and the net total can be in any currency, but the total VAT must be in sterling. If you invoice in euros or dollars for a UK supply, convert the VAT using the UK market selling rate at the time of supply, HMRC's published period rate, or another method HMRC has agreed in writing. You can write invoices in another language, but HMRC can ask for an English translation within 30 days.

If an invoice mixes standard-rated items with zero-rated or exempt ones, the zero-rated and exempt lines must clearly show that no VAT is payable, and you must show a separate total for them. Many businesses find it simpler to issue separate invoices.

Invoices for non-VAT-registered businesses

If you're below the threshold and not registered, you still need a proper invoice, just without VAT. GOV.UK says it should show a unique number, your business name, address and contact details, the customer's name and address, a description, the supply date, the invoice date, the amounts charged and the total owed. A sole trader must show their own name as well as any trading name, plus an address where legal documents can be served if they use a business name. A limited company must show its full registered name as it appears on its certificate of incorporation, and if it lists directors' names it must list all of them.

Full vs simplified vs modified VAT invoices

HMRC allows shorter invoices for low-value sales. The three types do different jobs, and choosing the wrong one is a common reason a customer's VAT claim is queried.

The three types of VAT invoice compared

	Full VAT invoice	Simplified VAT invoice	Modified VAT invoice
When you can use it	Any sale	Supply worth £250 or less including VAT, customer agrees	Retail sale over £250 when a customer asks for an invoice
Customer's name and address	Yes	No	Yes
Values shown	VAT-exclusive per line, VAT total in sterling	VAT-inclusive total per VAT rate	VAT-inclusive values per line
Invoice number	Yes	Not listed in HMRC's minimum	Yes
Can include exempt items	Yes, shown separately	No	Yes, shown separately
Typical user	B2B traders, contractors	Cafés, shops, taxis, trade counters	Shops selling higher-value items

When you can use it

Full VAT invoice

Any sale

Simplified VAT invoice

Supply worth £250 or less including VAT, customer agrees

Modified VAT invoice

Retail sale over £250 when a customer asks for an invoice

Customer's name and address

Full VAT invoice

Yes

Simplified VAT invoice

No

Modified VAT invoice

Yes

Values shown

Full VAT invoice

VAT-exclusive per line, VAT total in sterling

Simplified VAT invoice

VAT-inclusive total per VAT rate

Modified VAT invoice

VAT-inclusive values per line

Invoice number

Full VAT invoice

Yes

Simplified VAT invoice

Not listed in HMRC's minimum

Modified VAT invoice

Yes

Can include exempt items

Full VAT invoice

Yes, shown separately

Simplified VAT invoice

No

Modified VAT invoice

Yes, shown separately

Typical user

Full VAT invoice

B2B traders, contractors

Simplified VAT invoice

Cafés, shops, taxis, trade counters

Modified VAT invoice

Shops selling higher-value items

Simplified invoices (£250 or less)

You can issue a simplified invoice when the value of the supply is £250 or less including VAT and your customer agrees. If your business is in Northern Ireland, the customer must not be from an EU member state. A simplified invoice needs only:

• your name, address and VAT registration number
• the time of supply (tax point)
• a description that identifies the goods or services
• for each VAT rate, the total amount payable including VAT, and the VAT rate

Exempt supplies can't go on a simplified invoice. The £250 limit applies to the individual supply, not to a customer's spending over a month, so you can't split a £600 order into three "simplified" invoices to avoid a full one.

Retailers have their own version, the retailers' VAT invoice, with the same contents and the same £250 limit. A card terminal slip can serve as a retailers' VAT invoice if you add your VAT number, the VAT rate and a description to the details it already shows. If you hand over both a card slip and a receipt, only one of them may be the VAT invoice. Petrol and diesel have a special rule: up to £250 you can issue a less detailed invoice; above it you can show the vehicle registration instead of the customer's name and address.

Modified invoices (retail sales over £250)

If you're a retailer and a customer asks for a VAT invoice on a sale over £250, VAT Notice 700/21 says you must issue either a full VAT invoice or a modified VAT invoice that shows VAT-inclusive rather than VAT-exclusive values. That suits shops whose prices are displayed with VAT included. Everything else a full invoice needs — the number, tax point, both parties' details, descriptions, rates and the total VAT in sterling — still has to be there.

Worked examples

A full invoice with mixed rates. Fernside Print Ltd is VAT registered and supplies a publisher with 200 paperback books at £4.25 each (zero-rated), 50 A2 posters at £3.20 each (standard-rated) and 3 hours of design work at £40 an hour (standard-rated).

Fernside Print Ltd — invoice FP-1047 (tax point 6 October)

Line	Qty × unit price	VAT rate	Net	VAT
Paperback books	200 × £4.25	0%	£850.00	£0.00
A2 posters	50 × £3.20	20%	£160.00	£32.00
Design work	3 hours × £40.00	20%	£120.00	£24.00
Zero-rated total			£850.00	No VAT
Total			£1,130.00	£56.00

Paperback books

Qty × unit price

200 × £4.25

VAT rate

0%

Net

£850.00

VAT

£0.00

A2 posters

Qty × unit price

50 × £3.20

VAT rate

20%

Net

£160.00

VAT

£32.00

Design work

Qty × unit price

3 hours × £40.00

VAT rate

20%

Net

£120.00

VAT

£24.00

Zero-rated total

Qty × unit price

VAT rate

Net

£850.00

VAT

No VAT

Total

Qty × unit price

VAT rate

Net

£1,130.00

VAT

£56.00

The amount due is £1,186.00. The zero-rated books show "0%" and have their own total, as HMRC requires for mixed invoices. The invoice also carries Fernside's registered name, address and VAT number, the publisher's name and address, the invoice number FP-1047, the tax point and the issue date if it differs. If Fernside offered a discount for prompt payment, the rate would have to appear too. Our invoice generator lays these fields out for you, and the VAT calculator checks each line.

A simplified invoice. A builders' merchant trade counter sells a VAT-registered plumber £96.00 of fittings, VAT included. Because the sale is under £250 and the plumber is happy with it, the till receipt can be a simplified invoice showing the merchant's name, address and VAT number, the date, "copper fittings" and "Total £96.00 including VAT at 20%". The plumber works out the VAT using the VAT fraction for 20%, which is 1/6: £96.00 ÷ 6 = £16.00 of reclaimable VAT.

A modified invoice. A furniture shop sells a VAT-registered café owner six chairs at £120 each, VAT included, a total of £720. That's over £250, so when the customer asks for an invoice the shop issues a modified invoice listing the chairs at their VAT-inclusive price, with the café's name and address and the total VAT of £120.00 (£720 ÷ 6).

Tax points and time limits

The tax point (time of supply) decides which VAT return a sale goes on, so it matters as much as the amount. For goods, the basic tax point is when they're sent, collected or made available; for services, it's when the work is finished. Two rules can move it:

• Advance payment or invoice. If you're paid or issue an invoice before the supply, the earlier of those dates is the tax point.
• The 14 days rule. If you issue the VAT invoice within 14 days after the supply, the invoice date usually becomes the tax point. Issue it later and the tax point stays at the date of supply.

Separately, you must normally issue the invoice within 30 days of the tax point. You can go beyond that without asking HMRC when you're waiting for invoices from your own suppliers or subcontractors, when HMRC has already approved an extension of the 14-day rule or special accounting, or when you're newly registered and still waiting for your VAT number — in that last case you have 30 days from when you're told the number. In any other case, write to HMRC's VAT Written Enquiries Team first.

Example — joinery fitted on 2 October

2 October

Work finished: basic tax point

By 16 October

Invoice issued within 14 days: invoice date becomes the tax point

By 1 November

Normal deadline to issue the VAT invoice (30 days)

Return period

Sale goes on the VAT return for the period containing the tax point

If you use the VAT Cash Accounting Scheme, the tax point is always the date you're paid, but your customers still need a proper VAT invoice from you.

Credit notes, pro-formas and self-billing

Credit notes. If goods come back or you reduce a price, issue a replacement invoice or a credit note. GOV.UK says a credit note must contain the same information as the VAT invoice, the reason it was issued, the total amount credited excluding VAT, and the number and date of the original invoice. The credit note generator includes those fields. On your VAT return, credit notes you issue reduce boxes 1 and 6.

Pro-forma invoices. A pro-forma is an offer, not a demand for VAT. HMRC says it can't be used to reclaim input tax even if it shows every required detail, and it should be marked "this is not a VAT invoice". Once you supply the goods or receive payment, you must issue a proper VAT invoice. Our pro-forma invoice generator adds that wording automatically.

Self-billing. Some large customers, especially in haulage, manufacturing and construction, raise the invoice for their suppliers. Self-billed VAT invoices must carry the reference "self billing", and both parties must meet the conditions in VAT Notice 700/62, including a written agreement. The supplier must not issue its own VAT invoice for the same supply.

Reverse charge. Invoices for building and construction services under the domestic reverse charge, and for some other specified supplies, follow special rules: the supplier doesn't charge VAT and the customer accounts for it. See our guide to the domestic reverse charge for the wording to use.

Rounding the VAT on an invoice

Invoice traders can round down the total VAT on an invoice to a whole penny and ignore fractions. If you calculate VAT line by line, round each line either down to the nearest 0.1p or to the nearest 1p or 0.5p, and be consistent. Retailers who calculate VAT at line or invoice level must not round down, though they can round normally up or down. Rounding rarely changes much on one invoice, but inconsistent rounding across thousands of till transactions is a well-known audit finding.

Common mistakes that block a VAT reclaim

From the customer's side, a missing detail can cost real money: HMRC says you can't reclaim VAT using an invalid invoice, a pro-forma, a statement or a delivery note, and you can never claim more VAT than a valid invoice shows. The errors that cause most trouble are:

1. No VAT number, or the wrong one. Customers can check it with our VAT number lookup guide.
2. A simplified invoice over £250. The customer has no valid evidence for the VAT.
3. VAT shown in a foreign currency only. The VAT total must be in sterling.
4. Missing customer details on a full invoice. A full invoice must show who was supplied.
5. Duplicate or reused numbers. Every document needs its own number, and cancelled invoices must be kept.
6. Charging VAT on a zero-rated item, or the wrong rate. The customer may only reclaim VAT that was properly chargeable.
7. Paying less than the invoice. If a customer pays only part, they can reclaim VAT only on what they paid.

If a supplier sends you an invoice where the amount is wrong, ask them to correct it and issue a new invoice rather than amending it by hand. If you issued the wrong invoice, issue a credit note and a fresh invoice, keeping both.

E-invoicing: what changes from 2029

The government announced at Budget 2025 that all VAT invoices must be issued as e-invoices from 2029. Its consultation response, published on 26 November 2025, confirms the scope: invoices between businesses and to government where VAT is due, not sales to consumers.

An e-invoice here means a structured data file that software can read directly, not a document a person reads. The response says PDF and Word invoices, JPEG images, HTML invoices in a web page or email, and scanned or faxed invoices don't count. That's a big shift for small firms that currently email a PDF from a template.

The road to mandatory e-invoicing

Step 1

Feb 2025: consultation opens

Step 2

Budget 2025: mandate announced

Step 3

Jun 2026: Peppol chosen

Step 4

Roadmap

Budget 28 October 2026

Step 5

Mandate

2029

On 23 June 2026 HMRC and the Treasury confirmed that Peppol will be the core interoperability network for UK e-invoicing, so a supplier using one provider can send invoices to a customer using another. Public bodies covered by the Procurement Act 2023 already have to accept e-invoices that meet the BS EN16931 standard, and NHS Supply Chain already requires Peppol invoices.

Several details are still open: the exact start month, whether there will be phasing by business size, the data standard, and how the mandate will sit alongside Making Tax Digital. The government promised an implementation roadmap at Budget 2026, which is on 28 October 2026. Many commentators expect April 2029, but GOV.UK hadn't confirmed a month when we checked in October 2026. Until then, today's rules apply in full: a PDF or paper invoice that shows the required details is a valid VAT invoice.

What you can do now is cheap. Move invoicing into software rather than a word-processor template, keep your customer records (names, addresses, VAT numbers) clean, and when you next review software, ask the provider about their Peppol plans.

Keeping copies

You must keep a copy of every VAT invoice you issue, including ones you cancel or produce by mistake, and every purchase invoice you receive, original or electronic. Keep VAT records for at least 6 years, or 10 years if you use the One Stop Shop. Electronic copies are fine as long as they're complete and readable. Our guide to how long to keep business records sets out every retention period in one place.

Official HMRC and GOV.UK links

• VAT guide (VAT Notice 700)Sections 16–17: invoice contents, simplified invoices, time limits
• Record keeping (VAT Notice 700/21)Full, simplified and modified invoices; 6-year rule
• Charge, reclaim and record VATTax points, credit notes, invalid invoices
• Electronic invoicing (VAT Notice 700/63)Rules for sending and storing electronic invoices today
• E-invoicing consultation responseMandate from 2029 and what counts as an e-invoice

What to do next

Pull up your current invoice template and tick it against the 11-point checklist above, paying special attention to the tax point, the VAT rate per line and the sterling VAT total. If you sell at a counter, decide when staff can give a simplified receipt and when a full invoice is needed. Then generate your next invoice with the free invoice generator, and if a customer pays late, read our guide to late payment interest. Watch for the e-invoicing roadmap at the Autumn Budget on 28 October 2026.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

What must a VAT invoice include in the UK?

A full VAT invoice needs a unique sequential number, the time of supply (tax point), the issue date if different, your name, address and VAT number, the customer's name and address, a description of each item, the quantity, unit price, VAT rate and net amount per line, the net total, any cash discount rate, and the total VAT in sterling.

When can I issue a simplified VAT invoice?

When the VAT-inclusive value of the supply is £250 or less and your customer agrees. It needs only your name, address and VAT number, the tax point, a description of what you supplied, and for each VAT rate the total including VAT and the rate. Exempt supplies can't be included. Above £250, or if the customer asks, issue a full invoice.

How long do I have to issue a VAT invoice?

Normally within 30 days of the tax point. If you issue it within 14 days of the supply, the invoice date usually becomes the tax point. Some delays are allowed without asking HMRC, for example when you're waiting for your own subcontractors' invoices; otherwise you must apply to HMRC for more time.

Can I reclaim VAT with a pro-forma invoice or a delivery note?

No. HMRC says you can't reclaim VAT using an invalid invoice, a pro-forma invoice, a statement or a delivery note. Ask the supplier for a proper VAT invoice. If you have paid less than the invoice amount, you can only reclaim VAT on what you actually paid, and never more than the VAT shown on a valid invoice.

Can I issue VAT invoices if I'm not VAT registered?

No. Only VAT-registered businesses can issue VAT invoices or charge VAT. If you're not registered, your invoices must not show VAT or a VAT number. Once your taxable turnover passes £90,000 you must register, and you can then start issuing VAT invoices from your effective date of registration.

Is a PDF invoice an e-invoice?

Not for the coming mandate. In its November 2025 consultation response the government said PDF or Word invoices, images and invoices in an email body don't count as e-invoices. Today a PDF is a perfectly valid VAT invoice, but from 2029 VAT invoices will have to be issued in a structured electronic format.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 11 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.VAT guide (VAT Notice 700), sections 16 and 17 — HMRC (GOV.UK) · accessed 11 October 2026
2. 2.Record keeping (VAT Notice 700/21) — HMRC (GOV.UK) · accessed 11 October 2026
3. 3.Charge, reclaim and record VAT — GOV.UK · accessed 11 October 2026
4. 4.Invoicing and taking payment from customers — GOV.UK · accessed 11 October 2026
5. 5.Promoting electronic invoicing across UK businesses and the public sector — consultation response — HMRC and Department for Business and Trade (GOV.UK) · accessed 11 October 2026
6. 6.Tax update 2026: simplification, modernisation and fairness — summary — HM Treasury / HMRC (GOV.UK) · accessed 11 October 2026
7. 7.Autumn Budget 2025: e-invoicing will go ahead from 2029 — ICAS · accessed 11 October 2026