VAT Invoice Example UK: How to Create One Correctly

What Is a VAT Invoice?

A VAT invoice is a document issued by a VAT-registered business that shows the VAT charged on a sale. It's legally required when selling to other VAT-registered businesses, as they need it to reclaim VAT on their purchases. If you're VAT registered in the UK, you must issue a VAT invoice for most business-to-business transactions.

VAT Invoice Example

Here's what a compliant UK VAT invoice looks like:

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INVOICE

From: Smith Design Ltd
123 High Street, London, EC1A 1BB
VAT Registration: GB 123 4567 89

To: ABC Marketing Agency
45 Queen's Road, Manchester, M1 2AB

Invoice No: INV-0047
Date: 15 May 2026
Tax Point: 15 May 2026

Description          Qty    Rate     Amount
─────────────────────────────────────────
Brand Strategy        1    £2,000    £2,000
Logo Design           1    £1,500    £1,500
─────────────────────────────────────────
                         Subtotal:   £3,500
                         VAT (20%):    £700
                         TOTAL:      £4,200

Payment Terms: Net 30
Bank: Barclays | Sort: 20-30-40 | Acc: 12345678
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Key Elements of a VAT Invoice

• VAT Registration Number — Your GB VAT number must appear on the invoice
• Tax Point — The date the supply took place (often the same as the invoice date)
• VAT Rate — Show which rate applies (Standard 20%, Reduced 5%, Zero 0%)
• VAT Amount — The exact VAT charged, shown separately from the net amount
• Net and Gross Totals — Show both the amount before VAT and after VAT

Different VAT Rates in the UK

• Standard Rate (20%) — Most goods and services
• Reduced Rate (5%) — Home energy, children's car seats, some renovations
• Zero Rate (0%) — Food, books, children's clothing, public transport
• Exempt — Insurance, education, health services (no VAT charged)

Common VAT Invoice Mistakes

• Charging VAT when you're not registered — this is illegal
• Forgetting to show the VAT number
• Not separating VAT from the net amount
• Using the wrong VAT rate for your goods/services
• Issuing VAT invoices more than 30 days after the supply

When Do You Need to Register for VAT?

You must register for VAT if your taxable turnover exceeds £90,000 in any 12-month period. You can also voluntarily register below this threshold, which lets you reclaim VAT on business purchases but means you must charge VAT on your sales.

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