VAT Invoices

[FFN]

I am hoping you guys can help.

I have a few invoices from retail suppliers at the moment that do not meet the criteria of a VAT invoice.

Basically as part of my business I pick up stock from others in the same business as me when they put theres on sale. I buy it at the price they are selling it for and then sell it on for profit. This is not my main supply route but it does allow me to top up on stock. The invoice I receive from them though is not a VAT invoice, I know I am technically allowed to go back and ask for a VAT invoice but because I order regularly they would want to know why and would tie my name to the business, I am a sole trader, and they would probably be unlikely to continue to let me buy from them.

I have read a document for HMRC about acceptable reasons that you don’t need a full VAT invoice but it seems to be at the discretion of HMRC.

Can anyone give some advice on this? There is a clear path showing that the stock is bought and sold purely for business needs and the reason I can’t get a VAT invoice is because of business reasons. Is there any way around this?

[Marie Stein]

Hi FFN

Unfortunately I don’t think that there is an easy answer to this one. You’re right that HMRC do have discretion to accept evidence other than VAT invoices but I’ve only ever seen this in very extreme circumstances. The law states that you have to have a VAT invoice to recover input tax on expenditure so HMRC only accept other evidence as an exception to the rule, for example if records have been destroyed in a fire.

You don’t say what sort of value the goods are and there are different rules for goods valued at over £100 or lower value. I assume that you do receive a receipt of some sort every time you purchase goods. Most “retail” invoices for purchases under £100 do include information that would be sufficient to treat the document as a less detailed VAT invoice or a modified invoice – see section 16.6 of VAT Notice 700 http://tinyurl.com/6fhta9r. All retailers are supposed to issue invoices if asked and most normal cash receipts do contain sufficient detail to qualify as a less detailed invoice. I know you’re not keen to ask for full VAT invoices but if you’re asked, perhaps you could say that your accountant has asked you to get proper invoices to match up to your bank records.

The alternative is that you could write to HMRC and explain your circumstances and see if they are willing to accept whatever receipts you currently receive from your suppliers as long as you can back up the expenditure with proper bank/cash records. There is no harm in asking, though bear in mind that your query might prompt them to come out and visit you!

Marie

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