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VAT: Value added tax is one of the most complex and onerous tax regimes imposed on business - so complex that many businesses inadvertently overpay or underpay VAT. We provide an efficient cost effective VAT service, which includes: Assistance with VAT registration Advice on VAT planning and administration Use of the most appropriate scheme VAT control and reconciliation Help with completing VAT returns Planning to minimise future problems with Customs and Excise Negotiating with Customs and Excise in disputes and representing you at VAT tribunals SFiling accounts with Companies House We are charging a £70.00 fee for VAT Preparation (1-20 invoices per month)
Value Added Tax (VAT) is a tax businesses charge when they supply their goods and services in the United Kingdom (UK) or Isle of Man (IOM). It is also charged on goods, and some services, that are imported from places outside the European Community (EC) and on goods and services coming into the UK from another EC Member State.
VAT is charged on the value of supplies of taxable goods and services made in the UK, including some exports to EU countries. It is also chargeable on imports of goods from outside the EU. The main rates are zero and 17.5%, but a few supplies are charged at 5%.
All traders must register for VAT if they make taxable supplies which exceed the set limits. Where the value of taxable supplies in the previous 12 months was more than £61,000, or is likely to exceed this annual limit within the next 30 days, the trader has to register within 30 days. Failure to notify on time attracts penalties.
The VAT System:
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A registered trader must charge customers output VAT on any sales. The value of input VAT can be offset against output VAT and the excess output VAT is paid over to Customs and Excise. Where there is an excess of input VAT, tax may be reclaimed. Some input VAT cannot be reclaimed: Purchases of motor cars, except cars bought wholly for business purposes. Business entertainment expenses.
Most businesses have to account for VAT at the date that the invoice for the supply is raised. However, traders can claim VAT bad debt relief on debts more than six months old that have been written off.
VAT Registration - 'Pros' and 'cons': As with most things, there are pros and cons in registering for VAT. On the down side, you have the administrative burden of completing registration forms and quarterly VAT returns, although most modern computer accounting packages will do the work for you anyway. You will also have to charge VAT to your customers. If they are mainly VAT registered themselves, it will have minor cash flow effect, but that aside, should cause no problems. On the other hand, if your clients are not VAT registered, or are private individuals, then overnight you will make yourself 17.5% more expensive, and be commercially disadvantaged as a result.
On the plus side, you will be able to recover the VAT on your purchases, and not just those from the date you register for VAT. VAT can also be recovered on goods or assets purchased three years prior to registering for VAT, provided they are still on hand at the time of registration, and the normal evidence for the deduction of input VAT is retained (i.e. the purchase invoice). You cannot recover VAT on the items that you no longer have at the time of VAT registration because they have been sold or used up.
VAT on Services: With services, the rules are slightly different. VAT on services can only be recovered on services received six months prior to VAT registration. The services have to be used for business purposes, and you must also retain the purchase invoice(s).
You are supposed to claim back any pre-registration VAT on your first VAT return. However, HMRC may allow the claim to be made on a later return, up to three years after the date the first return was due. You could, therefore, reclaim the VAT on goods or assets six years after they were acquired.
A corporate body can recover VAT incurred before incorporation on its first VAT return providing the person to whom the supply was made, or who paid for the supply, became a member (shareholder), officer or employee of the corporate body and was reimbursed for the whole cost of the goods or services and they were acquired for the purposes of the business.
In addition, there is the perceived ‘street cred’ of being VAT registered. If your customers are mainly large companies, and they see you are not VAT registered, they may think your business is not large enough to service them properly. With a VAT number, however, the may assume you are bigger than you are, and take your business more seriously.
On a practical level, VAT registration can take up to two months to complete due to backlogs at HMRC, even though the Taxpayers Charter says are supposed to do it in 15 working days.
No VAT Registration Number? So, what happens if you have applied for VAT registration from a current date, and you do not have a VAT number yet? Without a VAT number you cannot issue VAT invoices. HMRC will advise you to charge a VAT-inclusive price on your 'invoice' and add a statement that the price includes VAT, and that you are VAT registered but have not yet received your VAT number. Once you get the number, you should issue a VAT invoice within 30 days. Be prepared, however, for the fact some customers may query this treatment, and be reluctant to pay until they get a proper VAT invoice. UK VAT Registrations: Application for VAT Registration in UK - £150.00
THE VALUE ADDED TAX SYSTEM
Value Added Tax, or VAT, is a tax most suppliers of goods and services charge by adding it to those goods and services. Business supplies include selling goods, renting and hiring goods, business stock used for private reasons, services including hairdressing, charging an admission price for buildings, and providing supplies as a self-employed person.
VAT rates vary according to the goods and services supplied. There are four categories:
Exempt Supplies: Including education, finance, insurance, and the services of doctors and dentists (but not some other services, such as osteopaths). There is no Value Added Tax charged on exempt supplies. If you only supply exempt services, you cannot usually register for VAT. However if you are Value Added Tax registered and have some exempt supplies, you may have difficulty claiming back all your input tax.
Zero Rate: Charged on most food (but not restaurant or takeaway meals), children's shoes and clothing, prescriptions, books and newspapers, new house sales and prescriptions. If the only goods you supply are zero-rated, you may not have to register to VAT – but you do have to apply for exemption from registration.
Reduced Rate: A rate of 5% that includes fuel and power used in homes and by charities.
Standard Rate: Now 17.5%, and applied to all goods and services which do not fall into the other three categories.
UK LTD Companies from only £32.00! All Inclusive Company Registration. Each limited company package includes all statutory paperwork and is fully compliant with company law. All our private UK companies are general trading companies and can be used to conduct any type of business. A Certificate of Incorporation, and the Memorandum and Articles of Association of your company will be sent to you upon formation of your company. You can appoint your own directors and secretary BEFORE company incorporation. This is absolutely FREE. Our 4-8 hour online incorporation service enables you to register your company quickly and effortlessly. All government and filing fees are included in the cost of our E-Quick pack. All certificates and documents will be sent directly to you via email immediately following the formation of your company. It will take just 5 minutes to complete the online registration form, then your company could be up and running within 4-8 working hours.
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Once your turnover reaches the threshold (£61,000) - or will within 30 days - you must register for Value Added Tax. To work out whether you have to register, you can ignore the value of any capital assets - buildings, vehicles or equipment - you have sold and any exempt supplies. Putting off registration can be expensive as you may have to pay Customs and Excise the tax that you should have collected plus a fine as well. There are severe penalties for late registration and for VAT evasion.
Most businesses collect more VAT from their customers than they pay to their suppliers. They then fill in a quarterly Value Added Tax return, and pay the surplus to Customs and Excise. If you need to register, you have to account for VAT whenever you supply goods and services.
For VAT purposes, the tax you charge on those supplies is your output tax. Customers registered for Value Added Tax who are using your supplies for their business then register the tax you charge them as their input tax.
Input tax is the VAT you have paid your suppliers for business purchases and expenses. It includes Value Added Tax on raw materials and things you buy to re-sell, as well as business equipment, business phone calls and payments for professional services, such as accountants' fees. If you regularly pay out more VAT than you collect, you can fill in a return every month and claim a refund from Customs and Excise.
However you cannot reclaim input tax on some cars, certain entertainment expenses or if you only supply exempt goods and services.
Remember that it is you, not your business, who is registered for VAT. Registration covers all parts of your business, so you need register only once. If you bought your business as a going concern, you need to look at the taxable turnover to see whether you need to register. Your registration date will be the day you took over the business. If the previous owner was Value Added Tax -registered already, you may be able to retain the existing VAT number.
To register for Value Added Tax, you need to contact your local Customs and Excise office - which you can find in your local phone book - and complete Form VAT1. If you are in a partnership, you need to fill in VAT2 as well.
VALUE ADDED TAX EXEMPT SUPPLIES
Certain supplies are exempt from VAT. Output VAT is not charged on such supplies and, in principle, input VAT attributable to such supplies cannot be reclaimed (or the claim is restricted).
Relatively small businesses may be able to reclaim all their input VAT - even for their exempt supplies. The input VAT attributable to their exempt supplies must not exceed £7,500 a year and must be no more than half the VAT on all their purchases.
Exempt supplies include: insurance, finance, health, education, and burial and cremation services.
In general, leases and sales of non-domestic land and buildings, other than newly built ones, are exempt, unless the option to tax has been exercised.
A taxable person may choose to charge output VAT on supplies of existing buildings and land (including rents) that are not used for residential or charitable purposes.
Sales of new buildings are standard-rated unless they are used for residential or charitable purposes.
VALUE ADDED TAX ZERO-RATED SUPPLIES
If a business makes zero-rated supplies, it does not charge VAT on supplies but can reclaim input VAT.
Zero-rated supplies include:
Most food and some drinks - but not catering, restaurant meals or hot take-away food. Domestic supplies of water and sewerage. Books and most other publications. Sales of new residential buildings and buildings for use by charities. Supplies of services by contractors when constructing new residential buildings or buildings for charities. Alterations to some buildings where listed building consent is needed. Public transport of passengers. Drugs, medicines and aids for the disabled. Clothing and footwear for children. Exports of goods and certain services to non-EU countries.
EU SINGLE MARKET
Where sales are made to businesses that are registered in other EU countries, the supplier need not charge VAT:
The customer's VAT number must be shown on the sales invoice. The customer is then responsible for accounting for output VAT on the goods on its own VAT return, but may claim input VAT if the goods are for use in making taxable supplies. However, output VAT must be charged on sales to private individuals in other EU states.
COLLECTION OF VAT AND PENALTIES
Registered traders normally have to submit VAT returns, and pay any VAT due, every three months. Collection of vat and penalties:
Traders who regularly reclaim VAT from Customs and Excise may apply to submit monthly returns. Some large companies have to pay monthly. Tax on imports from outside the EU has to be paid at the time of importation, unless special arrangements are set up. Traders with a turnover of £600,000 a year or less can complete annual returns only, making nine monthly VAT payments on account, with a final payment due along with the year-end return. Penalties are charged for late or incorrect VAT returns. A default surcharge of between 2% and 15% of the VAT payable is charged where returns are late. A penalty of 15% is charged for serious or persistent misdeclarations. A penalty of between 5% and 15% is charged where a person is late in registering for VAT. Interest can also be charged on VAT paid late.
CHANGING REGULATIONS
Value Added Tax rules are changing, year by year, to make the tortuous business of registering and filling in VAT returns easier. Until March 1990, the limit for VAT registration was just £25,400, and even the smallest of businesses quickly ran into the time-consuming process of filing VAT returns. Now the threshold is much higher (£61,000), putting it beyond the reach of the newest and smallest businesses.
There are now special schemes to make life easier for small and medium sized enterprises (SMEs). The cash accounting scheme lets you account for Value Added Tax on the basis of payments you have made and received, instead of on the basis of invoices issued. This means that you automatically have bad debt relief and it also helps if you allow periods of credit or have late payers.
The annual accounting scheme was also extended, with limits doubled so that they now apply to businesses with a turnover of up to £600,000. Annual accounting removes the slog of quarterly tax returns from small businesspeople. Once you have been Value Added Tax registered for a year, you can send in just one annual return and pay monthly by direct debit.
VAT RECORD-KEEPING
Rather like keeping records for the Inland Revenue, you need to be meticulous about Value Added Tax record keeping. You need to record all your business transactions, and keep documents including bank statements, bills, receipts and cheque stubs to back them up. You also need to separate your business transactions from your personal finances.
For VAT purposes, you must keep a record of all the supplies you make and receive, and a summary of Value Added Tax for each tax period covered by your tax returns. Records must be up to date and easy to find, and if you register for VAT you must keep your records for six years. Many businesses choose to employ an accountant or at least a book-keeper at this stage, to take the headache out of paperwork and leave them time to get on with running their business, especially since there are severe penalties for failing to keep records.
WHAT IF I OPT TO TAX MY LAND AND BUILDINGS?
For certain supplies of land and buildings, which would otherwise be exempt from Value Added Tax, you can choose to "elect to waive" the exemption and thus charge VAT on your supply (this is also known as the "option to tax"). If you do opt to tax, the value of the taxable supplies of the land and buildings covered by the option must be included in your taxable turnover when you are deciding whether you are liable to be registered or whether you wish to be registered on a voluntary basis.
If you are not already liable to be registered for Value Added Tax and you become liable to register, or wish to register voluntarily, following the option to tax, a written notice of your option must be included with your Form VAT1 (Application for Registration). If you have already made an exempt supply of the land or building (sale, leasing or letting) before the date from which you want your option to have effect, you must first get our written permission. However, you do not need to do this if you meet the conditions for automatic permission. If this is the case, when submitting your Form VAT1 please confirm in writing that you fully meet these conditions so that we can deal with your option to tax.
If you do not meet the conditions for automatic permission, we cannot process your application for registration until you get permission from our National Advice Service, unless you are making other taxable supplies and are required to, or wish to, register. Once you have permission to opt to tax, you should enclose a copy of the option to tax correspondence with your Form VAT1.
WHAT IF I ONLY SUPPLY GOODS OR SERVICES ABROAD?
If you have a business establishment in the United Kingdom (including a branch or agency) or your usual place of residence is the UK, but you only supply goods or services to customers based outside of the United Kingdom (which would have been taxable if made in the UK), then you are able to register for Value Added Tax on a voluntary basis as long as you receive taxable supplies from United Kingdom Value Added Tax registered businesses or import goods into the UK. If you think you might be able to register, you should phone National Advice Service for further advice.
WHAT IF I TAKE OVER A BUSINESS FROM SOMEONE ELSE?
If you take over a VAT registered business from someone else, as a going concern, you are liable to be registered, unless you qualify for exemption from registration. You may be able to transfer the previous VAT registration number to yourself. Your registration date would be the date you take over the business. If the previous owner was not registered for VAT, you must look carefully to see if you need to register.
DO I HAVE TO REGISTER IF I LIVE OR WORK ABROAD?
You may still have to register if you live in this country but carry out part of your business abroad or if you have a place of business in this country but live abroad. In these circumstances you have a business establishment in the UK and would be liable to register subject to the normal rules.
WHEN MUST I START KEEPING RECORDS AND CHARGING VAT?
You must start keeping records and charging VAT to your customers from the date you know you have to be registered. You can charge VAT before you are registered but until you have a registration number you must not show VAT as a separate item on any invoice you issue. You can change your prices to include VAT and explain to any of your customers who are also registered that you will be sending them VAT invoices later. Once you have your registration number you should send the necessary invoices showing VAT within 30 days.
If you have asked for voluntary registration you should start keeping records and charging VAT from the date you are registered. This will normally be the registration date you asked for on your application form. Please note that, once you are registered, you must account for and charge VAT on all your taxable supplies, distance sales, acquisitions and relevant supplies in the UK, regardless of whether those values are above the threshold, for example if you are registered because your distance sales are above the relevant registration threshold, once registered, you must account for VAT on all your taxable supplies and acquisitions in the UK.
IMPORTATION OF GOODS FROM OUTSIDE THE EU
Some transactions made by NETPs involve importing goods into the UK from outside the EC. The place of supply of the imported goods may affect whether you must register for VAT in the UK. The correct place of supply depends on who carries out the importation procedures. If you supply the goods and import them yourself, or they are imported under your direction, the place of supply is deemed to be the UK. If your customer is responsible for the importation, the place of your supply of the goods is deemed to be outside the UK.
TRADING WITH CUSTOMERS IN THE EU - BUT WITH NO OFFICES IN THE EU
If you incur VAT on trips to the EU, for example when attending exhibitions or visiting potential customers, it may be possible to recover some or all of this VAT by making a reclaim under the EC 13th Directive. In the UK, claims must be submitted on or before 31 December for each year ending 30th June. If you expect such claims to be made regularly it is usually worthwhile to seek advice on the first claim so that the relevant procedures can be set up in-house. Export of goods to the EU.
Businesses will expect to pay import VAT on your goods and recover it through their VAT returns. Consumers may receive an unpleasant surprise when required to pay import VAT, quite often with a significant administration charge. If you are likely to be selling goods directly to consumers, then planning in advance may allow you to take VAT into account when pricing and reduce the final cost to your customers. Export of Services to EU.
If you supply services to businesses in the EU, they will account for VAT through their own VAT returns. There is no need to register for VAT in the EU. However, if you supply certain types of services (e.g via the internet) to individuals, then you may have to register for VAT somewhere in the EU. Advance planning will help you identify where you are at risk, assist you in distinguishing between business customers and consumers and help you decide whether you need to register for VAT.
OFFICES PLANNED OR ALREADY ESTABLISHED IN THE EU
If you intend to establish a business in the EU, you need to take advice on how VAT will affect your business. If you apply the wrong rate of VAT to your sales, or fail to charge VAT when it should have been charged, it is possible that you could suddenly find that your cost of sales has risen substantially. It is thus essential that you take advice on how VAT will apply to your business. Some sales of goods and services are exempt from VAT, but with the result that VAT paid on the costs of the business is not deductible. VAT paid by the business is not recoverable and it becomes an extra business cost.
Proper advance planning will allow you to reduce the cost of irrecoverable VAT. If your sales of goods or services will be subject to VAT, then each member state has a threshold, above which you are required to register for VAT. Failure to register on time can result in you having to pay penalties, interest and any VAT which should have been charged from the date when the threshold was exceeded. The UK's threshold is the highest in the EU and one of the lowest standard rates.
VAT REFUND OPPORTUNITIES
Three-Year Capping: Following the recent Court of Appeal decisions in Fleming t/a 'Bodycraft, and Conde Nast Publications Ltd, the six-month 'transitional window' introduced for making claims prior to the introduction of the three-year capping provisions in 1997 have been deemed illegal (the transitional window was only retrospectively introduced by HMRC in 2002 following the ECJ decision in the Marks & Spencer case). HMRC refute the argument that their provisions were illegal, and are currently seeking to take Fleming (and probably Conde Nast) to the House of Lords.
General Refunds: On the face of it, businesses have the opportunity to claim any VAT refunds not made for periods prior to the three-year cap, and although HMRC are not agreeing to repay such claims at this point, it should not stop businesses from submitting 'protective claims in the meantime. Whether businesses still have the records, resources, and time to warrant producing such claims, however, is a key issue.
Toothbrush Scheme: One immediate spin-off from the above is the round of marketing letter being issued in relation to the 'toothbrush scheme' employed in the dentist sector. HMRC eventually killed off the scheme by introducing a second 'de minimis limit' from late 1994, but the Court of Appeal decisions mean that it can now be argued that any claims that were not made prior to the three-year cap are now eligible again, and should be submitted immediately (although HMRC closed the loophole, they agreed under the equity terms of the Taxpayer's Charter to allow any business to make a one-off claim for the period 1992 to 1995). Again, consideration should be given to dentist practices or other similar businesses that were essentially exempt but had some taxable income and related input tax below the old de minimis limit.
Care Homes: Another sector of business currently being courted for refund opportunities is the private care industry. Following the 'Kingscrest' case, which saw a profit-making care home successfully argue that its supplies were not exempt, and as such, could register for VAT and claim back substantial input tax, HMRC widened the exemption in 2002. Notwithstanding, there is still an opportunity for certain care homes to retrospectively register for VAT up to the point the law changed, and claim back VAT (less any output tax also due). The opportunity only really arises, however, where there was a reasonable proportion of local authority funded residents in the home (the higher the proportion the better). The other problem, again, is whether the records, resources and time warrant the claim to evaluate the existence of a claim.
Doctors: Following the 1 April 2006 changes in Prescription Pricing Authority funding, dispensing doctors are no longer able to have the VAT paid for on purchases of drugs they dispense. In view of this, HMRC are allowing dispensing GP practices to voluntarily register for VAT and claim back all the VAT incurred on such purchases. This is because the supply of drugs dispensed against an NHS prescriptions is zero-rated.
It should be noted that registration will trigger a VAT charge on other taxable supplies such as private prescriptions and (probably later this year) the fees charged for medical reports in personal injury cases and similar circumstances.
In December 2005, HMRC removed the exemption for Fixed Odds Betting Terminals & 'Section 16 machines'. In light of the ECJ's decision in the Linneweber case earlier in 2005 concerning an anomaly in the German VAT exemption on the physical location of betting machines, a strong argument then arose that the UK VAT treatment of other types of gaming machines prior to 6.12.05 was incorrect. There is now an opportunity to claim a refund of overpaid VAT, albeit that HMRC strongly reject the matter. Businesses in the sector are being marketed for the submission of protective claims, although it must be pointed out that the original three-year window is already down to 29 months.
Private Tuition: The Empowerment Enterprises case was heard in the Court of Session on 4/5 July 2006, and a decision is soon. The case concerns the validity of the UK exemption for private tuition, which currently excludes limited companies and employees/contactors of unincorporated entities. Should HMRC lose the case, there will be an opportunity for a VAT refund in relation to VAT wrongly accounted for on what would then be an exempt supply (less related input tax). In some cases, business will have been incorrectly VAT registered from day one, and will be able to deregister. It would remain to be seen whether HMRC would subsequently pursue the matter to the House of Lords and./or the ECJ, of course.
WHAT IS A VALID TAX INVOICE?
Introduction: This article explains the information which must be shown on a tax invoice, together with various other points about them. In theory, tax invoices, which are mostly produced by computer nowadays, should all comply with the law and should be easily recognisable. In practice, the infinite variety of layout on invoices complicates matters.
If your business receives a substantial volume of invoices, you are bound to be at risk for amounts big enough to lead to possible penalties. The sheer volume of transactions means there is a risk of documents slipping through, which are not tax invoices. To reduce the risk to a minimum, both managers approving invoices and clerks processing them through the accounting system, must understand the importance of a tax invoice and the details which it must contain. That requires training, which is not easy to carry out systematically, especially if there is a turnover of staff. Yet, untrained staff will break the law in your name!
So do I Have to Worry About My Input Invoices? Yes, you do! If your staff are not trained in what is required on a VAT invoice and you do not have a good enough system for checking for the key information, you are at risk; it is inevitable that VAT will be recovered on some documents which do not qualify. When did you last check your input invoice files for:
Supplier's statements which sometimes show VAT? Delivery notes, which are sometimes carbon copies of the invoice and could easily therefore show the VAT number if not the actual sum of VAT? Requests for payment which often contain either the VAT number or the amount of VAT? Pro forma invoices which may look much the same as an ordinary invoice?
HMRC will certainly disallow input tax claimed on the basis of such documents even if they take a more relaxed view on those which fail to state, for example, the type of sale; i.e. whether it is a sale, a lease, on hire-purchase or whatever.
This does not mean that you have to check every input invoice for every detail though, if you wanted to delay payment, a blitz on them might well produce a substantial number with minor defects. However, staff do need to confirm that:
The document is a tax invoice; and The VAT is being recovered in the correct period.
You cannot recover on a VAT return for the period ended 30 April the VAT on an invoice dated 1 May!
Do not Invent VAT! If a supplier sends you an invoice on which the VAT is incorrectly calculated, do not alter it! If you do, you cannot then prove to HMRC that the supplier has also corrected it. Strictly speaking, a document, which does not show the right amount of VAT, is not a tax invoice and HMRC could therefore disallow the lot. So if the sum matters, return it to the supplier for correction. If the amount of the error is trivial, you may decide to ignore it - though requiring the supplier to correct it is an excuse for delaying payment.
Information Required on a VAT Invoice: A VAT invoice must show:
An identifying number; The time of the supply; The date of the issue of the document; Name, address and registration number of the supplier; The name and address of the person to whom the goods or services are supplied; A description sufficient to identify the goods or services supplied; For each description, the quantity of the goods or the extent of the services,the unit price, the rate of VAT and amount payable, excluding VAT, expressed inany currency. The unit price for services can be an hourly rate or a standard price. If the supply cannot be analysed, the total price is the unit rate. HMRC accept that the unit price need not be shown at all if it is not normally stated in a particular business sector and it is not required by the customer (Notice 700 Para 16.3.2 as updated February 2004); The gross total amount payable, excluding VAT, expressed in any currency; The rate of any cash discount offered; The total amount of VAT chargeable, expressed in sterling (as a note if the invoice is in a foreign currency).
In theory, the rules are strict. If an invoice does not contain one or more of the above pieces of information, it does not qualify as the basis for recovering input tax. This was demonstrated in ABB Power Ltd (MAN/91/201 No 9373) where the Tribunal held that a document was not a tax invoice because it did not show the:
Type of supply - sale, hire-purchase, rental etc (no longer required); Correct tax point; Rate of tax applicable.
The ABB argument was in fact about HMRC' right to demand output tax on a document issued by ABB. However, if HMRC cannot collect output tax in such a case, what do you suppose they will do? It stands to reason, that they will deny input tax to the recipient.
In practice, if a document is obviously intended to be a VAT invoice, HMRC are unlikely to use minor deficiencies in it as a reason for disallowing input tax unless they have been unable to collect the output tax. However, they do insist on the key details, such as the name, address and VAT number of the supplier, enough information about the supply to identify it as something bought for the purposes of the business and the amount of VAT.
Invoicing in a Foreign Currency: You can invoice in any currency you wish but the document must also state the sterling equivalent for the VAT charged so as to ensure that a UK customer reclaims the same sum as you account for as output tax.
Foreign Currency Conversions: You can convert foreign currency at either:
The market selling rate in the UK at the time of the acquisition. The rates published in national newspapers are acceptable; or The period rate of exchange published by HMRC and available from the Nati
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Supplier's statements which sometimes show VAT?