All businesses need to keep records – and
this is even more important when you’re VAT-registered. You must keep VAT records as well as normal
business records, such as bank statements, cash books, and till rolls. You’ll need
these to complete your VAT return, so it pays to keep good records of your sales and purchases.
You must give a VAT invoice to a VAT-registered customer for goods or services charged at
either the standard rate of twenty per cent, the reduced rate of five per cent or for some
zero–rated supplies outside the UK. Here’s what a VAT invoice might look like. It includes
your business details, your VAT number, your customer’s details, a description of the
goods or services supplied, and the amount charged before and after VAT was added. You
must keep copies of all your VAT sales invoices, and all purchase invoices and credit notes.
You’ll use these to produce your VAT account. Here’s an example of a VAT account for a
quarterly trader. It’s a summary of the VAT charged on any sales and the VAT paid
on any purchases. Remember, you can then use the figures in your VAT account to complete
your VAT return. You can keep VAT records on paper or computer and there’s no set
format. But they must be accurate, complete and readable. HMRC can visit your business
to inspect your record keeping, and could charge you a penalty if your records aren’t
in order. You must keep your records for at least six years, or ten years if you supply
digital services in the EU and use VAT MOSS. If you’ve lost a VAT invoice or it’s damaged
and no longer readable, you can ask the supplier for a duplicate, but it must be marked ‘duplicate’.
You can find more about VAT invoices and record-keeping on GOV.UK and also in VAT Notice 700/21. Many
businesses sign up for HMRC’s regular help and support emails. These help you to do what
you need to do at the right time. You’ll find information about these emails and other
support from HMRC on VAT on the GOV.UK website. Thank you for watching this video.