One of the less glamorous parts of running a business is making sure you have the right paperwork for your VAT return. Part of this is a valid VAT receipt or invoice for every transaction where you reclaim VAT.
It sounds straightforward, right? But it’s an area that regularly trips people up. That Tesco’s meal deal you grabbed on the way to a client? The receipt you took from the till may not give you what HMRC are looking for.
We saw a dramatic rise in in VAT enquiries and compliance checks in 2025. So, it’s worth nailing the crucial distinctions between a VAT compliant receipt and a non-compliant one – especially before HMRC decide to take a closer look.
What does a VAT receipt or invoice need to include?
A valid VAT receipt or invoice for items above £250 must include:
- the date of issue of the document (where different to the time of supply)
- the supplier’s name, address and VAT registration number
- your business name and address
- a clear description of what was supplied
- the VAT percentage & the price before VAT for each item purchased
- the full net invoice total before VAT is added for all items
- the total VAT amount charged on all items, expressed in sterling
Every VAT-registered supplier of goods and services is legally required to give you a VAT receipt if you ask for one. What they don’t have to do is present it in a tidy, standardised format. That means valid VAT receipts and invoices can look wildly different, and spotting the right information isn’t always easy; especially when you’re in a hurry.
Here a compliant VAT invoice with the required information highlighted.
Simplified VAT Receipt
If the total cost is £250 or less (including VAT), you can use a simplified VAT receipt for your reclaim. A simplified VAT receipt must show:
• the supplier’s name, address and VAT registration number
• a unique invoice number
• the date of supply
• a description of the goods or services
• the VAT rate for each item (or confirmation that it’s zero-rated or exempt)
• the total amount paid, including VAT
Here’s a compliant and non-compliant VAT receipt.
Corporation Tax receipts
A VAT receipt is only required if you’re reclaiming VAT. For corporation tax, the bar is a little lower, but still very real.
To claim corporation tax relief, HMRC expect the receipt to show:
- the date of the transaction
- the vendor’s name and address
- what you paid (and any breakdowns or discounts)
- how you paid (cash, card etc.)
- what was purchased
Put simply, if you want to stay compliant across both taxes is to aim to get a valid VAT receipt wherever possible. If you’re not VAT registered, you only need to follow the corporation tax receipt rules above.
Costs that typically won’t include VAT
Some costs are either VAT-exempt or outside the scope of VAT, so there’s no VAT to reclaim in the first place. These include:
- Public transport costs – train, underground and bus
- Postage stamps
- Most financial services (such as bank charges)
- Insurance premiums
- Road tax
- Parking fines and penalties
For these types of costs, you shouldn’t expect a VAT receipt, and nothing should be reclaimed on your VAT return.
VAT and overseas services
In most cases when you are buying services from an overseas supplier, VAT shouldn’t be charged at all. But this depends on where the supplier is based, the type of service, and whether the correct information is provided at the point of purchase.
As a general rule, make sure you provide your business details and VAT registration number. This helps ensure VAT is treated correctly and avoids the risk of you being charged VAT that can’t be reclaimed.
Pre-registration VAT reclaim
It’s still worth collecting and keeping valid VAT receipts, even if you’re not VAT registered. Because if you do decide to register for VAT, you can reclaim some VAT:
- On services from the previous 6 months
- On goods from the previous 4 months
That’s lots of potential VAT reclaims sitting in your old receipts. But only if you have the right ones!
We’ve written more about HMRC VAT enquiries and how to be prepared. If you have any questions about this, or VAT in general, please get in touch with the team, we’re always happy to talk tax.
