You are about to post a supplier invoice and claim the VAT on it. It has a logo, a total and a bank account. But does it meet the rules that let you reclaim the VAT? HMRC is plain about the stakes: without a valid VAT invoice you may not be able to reclaim the VAT you were charged (VAT Notice 700, paragraph 19.5.1). The cheapest time to find a problem is before you post.
This is the checklist we would want when reviewing purchase invoices: what a VAT invoice must show, what a simplified invoice can leave out, what to do when it is wrong, and which checks can run automatically. It ends with six invented invoices.
Why the invoice matters
HMRC's VAT guide says VAT invoices provide evidence for claiming input tax, and that a VAT invoice is one that meets the content requirements in paragraph 16.3, or the simplified rules in paragraph 16.6 (VAT Notice 700, paragraph 19.5.3). A statement, a quote or a delivery note does not become a VAT invoice because it shows a VAT number. The content decides, not the title. Two quick rejections come from the same notice: a document marked "pro-forma" or "this is not a tax invoice" cannot support a claim, and only a VAT-registered business can issue a VAT invoice (paragraph 19.5.1).
A full VAT invoice: the checks
Paragraph 16.3.1 of VAT Notice 700 lists what a supplier must show on any VAT invoice they issue. Seen from the buyer's side, each item is a check you can tick or fail:
- Unique sequential number. A number from a series that identifies the document. Two different invoices with the same number from one supplier are a flag.
- Time of supply (tax point). Shown on the document, and the date of issue too where it differs.
- Supplier's name, address and VAT registration number. HMRC allows a trading name, but the name and address the supplier is registered under must appear somewhere on the document.
- Your name and address. The invoice should be addressed to the business making the claim.
- A description that identifies the goods or services.
- For each description: the quantity or extent of the service, the rate of VAT, and the amount payable excluding VAT.
- The total amount payable excluding VAT, the rate of any cash discount offered, and the unit price where it applies.
- The total VAT chargeable, in sterling. The net amounts can be in any currency, but the VAT total must be in pounds.
HMRC's trader records manual has a shorter statement of the same list (VATREC5010). Credit notes have their own rule: they must carry the same details as the original invoice and enough information to identify it (VAT Notice 700/63, paragraph 3.4).
Smaller invoices: what a simplified invoice may leave out
For supplies of £250 or less, a supplier can issue a simplified invoice if the customer agrees. It must show the supplier's name, address and VAT registration number, the time of supply, a description of the goods or services, and for each VAT rate the total amount payable including VAT and the rate (VAT Notice 700, paragraph 16.6.1). It does not need your name and address, and it does not need the VAT amount shown separately. (Paragraph 7.3.1 calls the same document a "less detailed" invoice.)
That last point matters for your entries. When the VAT is not shown, you work it out from the total using the VAT fraction. At 20% that is 20/120, or one-sixth, of the VAT-inclusive total (VAT Notice 700, paragraph 7.3.1). A £180.00 simplified invoice at 20% contains £30.00 of VAT.
When the invoice is not right
Do not just post it and hope. HMRC says that if you do not hold a valid VAT invoice, the first thing to do is ask the supplier for one. If that fails, you would need to satisfy HMRC that the conditions for input tax recovery are met, for example that a supply actually took place in the UK, that the supplier is a taxable person, and that you intend to use the goods or services for business. Even then HMRC's use of discretion depends on you showing that you took reasonable steps and that there is no risk of fraud (VAT Notice 700, paragraphs 19.5.3 to 19.5.5). Asking the supplier for a corrected invoice straight away is far cheaper than arguing for discretion later.
Checking the supplier exists
A VAT number printed on the invoice does not tell you it belongs to a real, registered business. HMRC offers an online service to check a UK VAT number, and GOV.UK says it lets you prove when you checked a number. Use it for any new supplier, any unusual invoice and any large claim, and note the date you checked. For EU suppliers, the European Commission runs the VIES validation service.
Six invoices and what to do with each
These are invented, built to show the checks. All assume the VAT rate on the client's list is 20%.
| Invoice | What is on it | Decision |
|---|---|---|
| 1 | Net £1,200.00, VAT £240.00, total £1,440.00. All required details present, addressed to the client. | Pass. Post as a draft bill. |
| 2 | Total £180.00 including VAT at 20%, with supplier name, address, VAT number, date of supply and description. No customer name, no VAT line. | Pass as a simplified invoice (£250 or less). Post VAT as £30.00 (one-sixth of £180). |
| 3 | Net £800.00, otherwise complete, but no supplier VAT number. | Hold. Ask the supplier for a corrected invoice before claiming. |
| 4 | Net and total in US dollars, VAT shown only as $320.00. | Hold. The VAT total must be in sterling. Ask for a corrected invoice. |
| 5 | Credit note for £90.00 net, no reference to any earlier invoice. | Hold. A credit note must identify the invoice it relates to. |
| 6 | Net £500.00, VAT £100.00, total £650.00. | Hold. The arithmetic does not agree. This is our own check, not an HMRC rule: net plus VAT must equal the total. |
Test invoice 2 in any tool you use. A process that insists on a VAT line will reject a valid simplified invoice, and one that never looks at the amount will accept a £600 invoice as "simplified". The £250 limit is part of the rule, and so is the VAT rate: without it you cannot work out the VAT.
Which of these checks can run automatically
Almost all of them. A supplier VAT number, a sequence number, an issue date, a description and a sterling VAT total are plain lookups. Net plus VAT against total is arithmetic. The £250 threshold is a comparison. A duplicate check is a comparison against what you have already posted. None of these needs a model to decide. Software may be needed to read the figures off the page, but the decision itself should be a fixed rule: it gives the same answer every time and says why.
What stays with a person: whether the supplier is genuine, whether the expense is for business purposes, and whether the claim is allowed at all. If you are building a process, our guide to supplier invoice processing for a small UK practice shows how these checks fit into a review queue, and our article on automating supplier invoice entry covers the method.
We are building Invoice Inbox, which runs these checks on forwarded supplier invoices and returns the rows with the failures marked. It is not on sale yet. Join the Invoice Inbox waitlist to hear when it opens.
Questions people ask
What must a supplier invoice show for me to reclaim VAT?
Everything in paragraph 16.3.1 of VAT Notice 700: a unique sequential number, the time of supply, the supplier's name, address and VAT number, your name and address, a description, quantities, rates and net amounts, and the total VAT in sterling.
Can I reclaim VAT on an invoice under £250 with no VAT line?
Yes, if it is a valid simplified invoice: £250 or less, the customer agreed, and it shows the supplier's details and VAT number, the time of supply, a description, and the VAT-inclusive total with the rate. The VAT is one-sixth of the total at 20%.
What if the supplier will not give me a valid VAT invoice?
Ask first, and keep a record of the request. HMRC may accept other evidence, but only if a supply took place and you took reasonable steps to get the invoice. Do not plan around that discretion.
Does the VAT have to be in pounds on a foreign currency invoice?
Yes, the total VAT chargeable must be shown in sterling where UK VAT is charged. The net amounts can be in another currency.
How do I check that a supplier's VAT number is real?
Use HMRC's online VAT number checker for UK numbers and note the date and result. For EU numbers, use the European Commission's VIES service.
Sources
- VAT guide (VAT Notice 700), HM Revenue and Customs, paragraphs 7.3.1, 16.3.1, 16.6.1 and 19.5.1 to 19.5.5 (accessed 8 October 2026)
- VATREC5010: VAT invoice: details which must be shown on a full VAT invoice, HM Revenue and Customs (accessed 8 October 2026)
- Electronic invoicing (VAT Notice 700/63), HM Revenue and Customs, paragraph 3.4 (accessed 8 October 2026)
- Check a UK VAT number, GOV.UK (accessed 8 October 2026)
- VIES VAT number validation, European Commission (accessed 8 October 2026)