Recovering VAT on Invoices less than £250

HMRC Public Notice 700/21 has been updated and one of the updates is in relation to new guidance on issuing VAT simplified invoices by businesses other than retailers.

Historically the Public Notice provided that only retailers could issue simplified invoices. A simplified invoice does not show the net, VAT and gross figures separately but should still show the VAT number of the trader.

The guidance has now been updated to state that "If you are not a retailer and the total value of your supply does not exceed £250 you may issue your customer with a simplified invoice."

If your business has recovered VAT on retailer simplified invoices but perhaps not on simplified invoices received from other traders (e.g. builder merchants), you can now go back and recover VAT incurred on simplified invoices. A check of items bought through petty cash or employee expenses might reveal some VAT you can now recover.

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