The ultimate guide on what to include in your tax invoice

A tax invoice is a commercial document that includes the services or goods you provided, the quantity, the unit price and the VAT on the goods or services. When you’re running your own business, you will need to issue tax invoices for jobs you completed for your customers. A tax invoice can be used to verify the sales or purchase price and the VAT on the job. ​

If both you and your customer are VAT registered it is a legal requirement to provide a VAT invoice within 30 days of when you make the supply.​

To be able to claim the VAT back on the purchase, you must have a valid tax invoice from your suppliers as well.​

While a tax invoice is mainly used for claiming or paying VAT, it may also be inspected by HMRC as a supporting document if they conduct an investigation or inspection on the records your business keeps. You must keep all your business records for seven years, including tax invoices, receipts, salary and wages records, tax returns and activity statements, and super contributions for your employees.​

Taken and adapted from the HMRC website here​

VAT invoices must include the following details:​

Payment options ​

If you have different payment options for your customers, always list them. The more options and details you provide to your customers, the faster you could receive money from them. If you charge your clients with late payment penalties, you should also list that on your tax invoice, so that your customers are aware of that.​

You can always use a Word or Excel template for creating a tax invoice. We’ve provided a tax invoice template for you to start with.​

You can also personalise your tax invoice using tools available online such as Canva or freeinvoicebuilder. Moreover, you are free to change the formatting, front and details to customise your tax invoice, even adding your logo. ​

But always remember to keep those HMRC requirements on it. ​

When you think about eInvoicing, it's more than sending your tax invoices electronically (e.g., via pdf and email), it's a direct and reliable data exchange between two accounting systems. eInvoicing reduces the amount of time handling and processing tax invoices, thus reducing human errors, delays, and administration time, making payments faster, smoother, safer and easier.​

If you have a lot of invoices to process each month, then einvoicing may be your better choice. One of the commonly used eInvoicing software is Xero. With a proper Xero subscription, you could generate your invoices on Xero, and send the invoices to your customers directly. ​

Making Tax Digital (MTD) for VAT requires all VAT-registered businesses to keep records digitally and file their VAT Returns using software. E-invoicing therefore ensures you are MTD compliant and reduces the administrative burden through producing and keeping records digitally.​

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We have a dedicated team of certified accountants and a support team to take care of your business no matter where you are, so you can focus on growing your business. We take out the ‘fluff’, break down the barriers and get things done. Looking out for you is what we are all about. Get started for free today.​