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Newsletter issue - December 07.
New rules about how to draw up a valid VAT invoice have came into effect on 1 October 2007, without much fanfare from the VAT office.
The biggest change is it is now compulsory to have unique and sequential numbers for your invoices. Most businesses do this anyway, but some restart their numbering every year, which could lead to identically numbered invoices in different years. If you use separate sequences for different customers that's fine as long as each sequence of invoices is separate and unique. You can also continue to use customer prefixes on the invoices, as long as no two customers have the same prefix.
If you use the special Second-hand Margin or the Tour Operators Margin VAT scheme, you need to state which scheme you are using on the face of the invoice. Other changes involve cross-border sales within the EC where the full VAT is not automatically charged to the customer. Where the sale is 'reversed charged', so the seller bears the VAT on the supply, the invoice must state this. Similarly if the sale is VAT exempt or zero-rated because the goods are moving across borders the invoice must make this clear.
The VAT office will operate a twelve-month grace period while these new rules bed-down, before they start to prosecute traders for non-compliance. However you need to plan any changes to your invoicing systems as soon as possible. Ask us if you need further information.
