VAT Receipts

Key points

• It may prove that a payment was made, but it does not necessarily establish what was purchased, its business purpose, whether the supplier was VAT registered or the amount of VAT charged.
• To reclaim input VAT, a business will normally need a valid VAT invoice or qualifying receipt containing the required information. If that evidence is missing, the VAT may need to be excluded from the return.
• Consider a £120 purchase that includes £20 of VAT. Losing one £20 claim may not feel significant. Repeating the same mistake across dozens of transactions throughout the year is a different matter.
• HMRC can also ask to inspect the evidence supporting claims. Although alternative evidence may sometimes be considered, acceptance is discretionary and should not be treated as the normal process.
• The solution is simple: photograph paper receipts immediately, forward digital invoices when they arrive and keep them connected to the relevant transaction.