Jun 11, 2025
VAT Records and Invoicing Requirements Explained: How to Stay Compliant with HMRC
Why VAT Records and Invoicing Matter
Being VAT-registered doesn’t just mean charging and reclaiming VAT. HMRC requires you to keep proper records and issue compliant invoices.
If your records are incomplete or invoices don’t meet HMRC standards, you risk penalties — and HMRC may even refuse VAT reclaims.
This guide explains the VAT record-keeping rules and what every VAT invoice must include.
VAT Record-Keeping Requirements
What Records You Must Keep
HMRC expects VAT-registered businesses to keep:
All sales and purchase invoices.
Copies of VAT invoices you issue.
Records of goods/services bought and sold.
Details of imports and exports.
Credit notes and debit notes.
VAT account showing VAT due and reclaimed.
👉 These records must usually be kept for at least 6 years.
Digital Record-Keeping (Making Tax Digital)
Since April 2019, most VAT-registered businesses must use Making Tax Digital (MTD) software to keep records and submit VAT returns.
Spreadsheets can still be used, but they must link digitally to HMRC (no manual re-typing).
VAT Invoice Requirements
When You Must Issue VAT Invoices
For all sales to other VAT-registered businesses.
Not required for sales to the general public (though you must still record them).
Types of VAT Invoice
Full VAT invoice – for most transactions.
Simplified invoice – if the total is under £250 (fewer details required).
Modified invoice – for retail supplies over £250.
What a Full VAT Invoice Must Include
A unique invoice number.
Your business name, address, and VAT number.
Invoice date and tax point (the “time of supply”).
Customer’s name and address.
Description of goods/services.
VAT rate applied.
Net amount, VAT amount, and total including VAT.
👉 Without this information, HMRC can reject the invoice as invalid.
Common Mistakes
Not issuing invoices with VAT numbers.
Forgetting to include the “tax point” date.
Using non-compliant templates downloaded online.
Keeping only paper records instead of MTD digital ones.
Why This Matters
For HMRC: Incomplete records can lead to fines, penalties, and rejected reclaims.
For You: Proper invoices protect your right to reclaim VAT and avoid disputes with customers.
For Clients: If you don’t issue valid invoices, they may refuse payment or reclaim themselves.
How Wexley & Associates Helps
We ensure clients are always compliant by:
Setting up MTD-compatible record-keeping systems.
Creating professional, HMRC-compliant VAT invoice templates.
Conducting regular reviews to ensure all records are audit-ready.
With Wexley & Associates, businesses stay protected, efficient, and ready for HMRC inspection.
Call to Action
Don’t let poor record-keeping or invalid invoices cost you money.
Contact Wexley & Associates today to ensure your VAT records and invoicing meet HMRC standards.
