Electronic invoicing

Produced by Tolley

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Electronic invoicing
  • Issuing electronic invoices
  • Invoice requirements
  • Sending invoices electronically
  • Advance electronic signature (AES)
  • Electronic data interchange (EDI)
  • Business controls
  • Format
  • Cross border supplies
  • Storing electronic invoices
  • More...

Electronic invoicing

This guidance note provides an overview of the requirements for businesses that will be issuing or receiving electronic invoices. Please see the Tax invoice requirements guidance note for more information on invoicing generally.

Issuing electronic invoices

Electronic invoicing involves the transmission and storage of invoices by electronic means. The invoice is not printed and issued as a paper document. Electronic equipment includes (this list is not exhaustive):

  1. wires

  2. radio transmission

  3. optical technologies

  4. other electromagnetic technology

SI 1995/2518, reg 13A(2); SI 1995/2518, reg A13; VATREC7000; Notice 700/63; VATA 1994, Sch 11, para 3(1)–(3); De Voil Indirect Tax Service V3.516, V7.427

Issuing electronic invoices has certain benefits including:

  1. improved order tracking and audit trails

  2. decreased handling costs and less likelihood of invoices being lost by the recipient

  3. increased speed issuing, accessing and retrieving invoices

  4. quick dispute resolution and security

  5. more environmentally friendly as uses less paper

  6. saves storage space as not required to keep paper copies or scan numerous invoices

  7. reduced postage costs

  8. improved cashflow as the recipient receives the invoice on a more timely basis

Notice 700/63, para 2.2

Electronic invoicing is not mandatory and businesses can continue to issue and receive paper invoices.

Businesses can also issue and receive invoices in both electronic and paper format. However, a business can only receive paper and electronic invoices for the same supplies whilst they are operating a trial of their electronic invoicing system. Once the trial has been completed the business must select one invoice method for supplies made and / or received.

Businesses are not required to notify HMRC they are using electronic invoicing.

Invoice requirements

Electronic invoices must show the same information as a normal VAT invoice. Please see the Tax invoice requirements guidance note for more information.

If the business is sending batches of invoices to the same customer, it is acceptable for the business to record details that are common to the individual invoices once per customer file rather than on each invoice.

From 1 January 2021, If a Northern Ireland

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