What Is a VAT Invoice?

What a VAT invoice is for (UK)
What a full VAT invoice must show (UK and EU, in summary)

A VAT invoice is an invoice that shows the value-added tax (VAT) charged on a sale, with the details the tax authority requires, such as the seller's VAT registration number, the VAT rate and the VAT amount. A VAT-registered customer uses it as evidence to reclaim the VAT they paid (UK: HMRC §16.2.1). What it must show depends on the country: this page summarizes the UK rules from HMRC and the EU rules from the EU VAT Directive, and quotes the UK rules for simplified invoices. It isn't tax advice; ask your accountant how the rules apply to you.

What a VAT invoice is for (UK)

HMRC's VAT guide (VAT Notice 700), section 16 (last updated June 25, 2026, opened October 29, 2026), says: "Whenever you supply standard-rated or reduced-rated goods or services to another VAT-registered person, you must give that person a VAT invoice." It explains: "Your customers need VAT invoices as evidence for reclaiming, as input tax, the VAT you have charged them."

What a full VAT invoice must show (UK and EU, in summary)

UK: HMRC's VAT Notice 700, paragraph 16.3.1, lists the details a full VAT invoice must show. They include a unique sequential number, the tax point, "your name, address and VAT registration number", your customer's name and address, a description, the quantity, the VAT rate, the amounts excluding VAT and the total VAT in sterling.
EU: Article 226 of the VAT Directive (Council Directive 2006/112/EC), in the consolidated version dated April 14, 2025 on EUR-Lex (opened October 29, 2026), lists the details required on EU VAT invoices. They include the date of issue, a sequential number, both parties' names and addresses, the goods or services supplied, the VAT rate and the VAT amount.

For the full quoted lists, see invoice compliance requirements.

Two points in Article 226 are worth noting. Point (3) applies to every invoice the article covers and requires "the VAT identification number referred to in Article 214 under which the taxable person supplied the goods or services". Point (11a) applies only "where the customer is liable for the payment of the VAT", and then requires "the mention ‘Reverse charge’". Check the rules of the EU country concerned, and ask your accountant.

Simplified VAT invoices (UK)

HMRC's VAT Notice 700, paragraph 16.6.1, allows a simplified invoice for a supply of £250 or less, if the customer agrees and the other conditions in that paragraph are met. It says: "The simplified invoice must include:"

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

Sample: a UK simplified VAT invoice

This is a sample with invented figures. A UK VAT-registered bike shop repairs a VAT-registered courier's bike for £180.00 including VAT, at the standard rate, which gov.uk gives as "standard rate of VAT (currently 20%)" (Charge, reclaim and record VAT, last updated October 30, 2024, opened October 29, 2026). The courier agrees to a simplified invoice.

Value of the supply: £180.00, which is £250 or less, so paragraph 16.6.1 allows a simplified invoice.
Price excluding VAT: gov.uk says "divide the price including VAT by 1.2", so £180.00 ÷ 1.2 = £150.00.
VAT included: £180.00 − £150.00 = £30.00.

Following paragraph 16.6.1, the shop's simplified invoice shows its VAT registration number, name and address, the tax point, a description such as Bike repair, and the total of £180.00 including VAT at 20%. The £150.00 and £30.00 are worked out for the shop's own records.

Where Billed fits

Billed's invoice software page says: "Save your tax rates and settings once, and Billed calculates taxes automatically when you create invoices and estimates."

Check that your invoices show the details your tax authority requires, and ask your accountant.

Frequently Asked Questions

What is a VAT invoice?

An invoice that shows the VAT charged on a sale, with the details the tax authority requires, such as the seller's VAT registration number, the VAT rate and the VAT amount. A VAT-registered customer uses it as evidence to reclaim that VAT.

What must a UK VAT invoice include?

HMRC's VAT Notice 700 lists the details, including a sequential number, the tax point, the seller's VAT registration number, the customer's name and address, the VAT rate and the total VAT in sterling. This site's invoice compliance requirements page quotes the full list. Ask your accountant how the rules apply to you.

What is a simplified VAT invoice?

In the UK, HMRC allows a simplified invoice for a supply of £250 or less when the customer agrees and other conditions are met. It must include "your name, address and VAT registration number", the tax point, a description, and the total including VAT for each VAT rate. In the sample on this page, a £180.00 repair includes £30.00 of VAT.

What does Article 226 of the EU VAT Directive require?

Among other details, Article 226 requires the supplier's VAT identification number on every invoice it covers, and, "where the customer is liable for the payment of the VAT, the mention ‘Reverse charge’". Check the rules of the EU country concerned and ask your accountant.

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What Is a VAT Invoice? Requirements and Types (UK and EU)