New EU VAT invoicing rules from 1st January 2013

As of January 1st 2013, new EU wide rules came into effect with the aim of simplifying the invoicing process for business. Most importantly the legal obstacles to the use of electronic invoices will be removed from the UK VAT legislation.


Electronic Invoicing 

Electronic invoices have been given parity with paper invoices. Following the changes, UK businesses will be able to issue electronic invoices to their EU business customers without these restrictions. In addition, the Electronic Data Interchange (EDI) requirements have been removed from the UK VAT legislation, so businesses can use their discretion to decide how to ensure authenticity of origin, integrity of content and legibility.


VAT Invoicing for Exempt Supplies

Unlike many other EU member states the UK already allows businesses to be released from the requirement of issuing a VAT invoice for an exempt supply. The change to existing rules now means that there will no longer be a requirement for a UK supplier making exempt insurance or financial services supplies to a customer in another member state to issue a VAT invoice. This is particularly relevant to cross border providers of insurance or financial services.


Use of a simplified VAT invoice for supplies up to £250 in value

All UK VAT registered businesses and not only retailers, as before, will now be able to use a simplified VAT invoice when they make a supply in the UK to a taxable person, where the value of the supply does not exceed £250 including VAT.

The invoice will only be required to show:
• the name, address and registration number of the supplier
• the time of supply
• a description sufficient to identify the goods or services supplied
• the total amount payable including VAT
• for each rate of VAT chargeable, the gross amount payable including VAT and the VAT rate applicable.


Time limit for issuing a VAT invoice for an EU cross-border supply

The rules for time limits for issuing a VAT invoice have been aligned within the EU.

The amended UK rules require the invoice to be issued by the 15th day of the month following that in which the goods are removed or the services performed. The changes will, in some cases, reduce the timescale for UK businesses to issue a VAT invoice.

If you are in any doubt about the new VAT invoicing rules, or have any questions or issues with VAT whatsoever, our highly qualified team of VAT experts are here to help you, call us today on 08458 502360 or use our online contact page here.


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