Invoices vs receipts

[brovski]

Hello,

We are a newly-formed small Ltd company that is not VAT registered at the moment.

As the nature of our business often requires us to purchase goods from retailers and online retailers, we are not always able to obtain a VAT invoice. As some of the goods we purchase end up being resold, we do, obviously, keep record of our expenses. However, these are mostly in the form of receipts and in case of online purchases - email receipts. They usually only include a description of an item we purchased, date, quantity and price. No business information, buyers details etc.

My question is about the difference between invoices and receipts. Is my understanding correct that both are accepted as evidence of a business expense by HMRC with the difference that only VAT invoice would allow us to reclaim any VAT paid should we become VAT registered in the future?

Or perhaps, we should chase every retail supplier for a VAT invoice (However, as I mentioned, this would not always be possible and would be very time consuming)?

Are we ok with simple receipts/email receipts we get from retailers as long as they match our bookkeeping records etc?

Many thanks for your insight.

 

[Mark T Jones]

If they are charging VAT they are legally obliged to provide a VAT receipt

 

[brovski]

Thank you for your input, Mark. Yes, they do include VAT amount on the receipts.

However, my question was more about the simple email receipts/order confirmations and whether they are accepted as business expense evidence in the eyes of HMRC or is it only proper invoicing documents that count as evidence?

 

[Scalloway]

Under £250 an invoice only needs to include a few details to be valid for reclaiming VAT.

 

[brovski]

Ok, but are the email receipts/order confirmation valid a business expense evidence and suitable for accounting/bookkeeping records?

 

[Mark T Jones]

My knowledge may be out of date, but from memory a qualifying invoice should show

Vat number
Date
Invoice/document number
Vat rate
Breakdown

 

[brovski]

Once again, I am not talking about invoices but about receipts.

 

[StevensOnln1]

HMRC have a checklist of what is required on a simplified VAT invoice, which should cover most online order confirmations and retail receipts under £250.

Charge, reclaim and record VAT

How to charge VAT, calculate VAT, VAT rates, reclaim VAT on business expenses, keep digital records.

www.gov.uk

 

[brovski]

Thank you @StevensOnln1 that helps but this is for VAT record keeping. We are not VAT registered and therefore will not be reclaiming it any time soon.

When we purchase from online retailers for our business, some email confirmations we receive do not have VAT amount stated on them. They only list the items, total price and savings etc.

My question therefore remains the same, do those count as evidence for record keeping in our case? Or do we need to chase each retailer and let them know we are a business and require a proper invoice rather than receipt?

 

[StevensOnln1]

If you aren't reclaiming any VAT then you just need evidence that you've incurred the expense, it doesn't matter whether it's an invoice or something else as long as you can show what you bought and who from.

 

[Scalloway]

I agree. As long as you have a document that says what was bought, who from and for how much then that will be ok.

 

[MyAccountantOnline]

Thank you @StevensOnln1 that helps but this is for VAT record keeping. We are not VAT registered and therefore will not be reclaiming it any time soon.

When we purchase from online retailers for our business, some email confirmations we receive do not have VAT amount stated on them. They only list the items, total price and savings etc.

My question therefore remains the same, do those count as evidence for record keeping in our case? Or do we need to chase each retailer and let them know we are a business and require a proper invoice rather than receipt?

An invoice which doesnt detail the VAT amount for a business which isnt VAT registered isnt an issue if it shows details of the items purchased.

Bear in mind too that an invoice or receipt isnt your only evidence of a business expense - it can/may also include an entry on a bank or credit card statement, emails, online messages placing orders etc.