VAT invoice generator

VAT invoice FAQ

What is a VAT invoice?

A VAT invoice is an invoice that includes Value Added Tax: a consumption tax used across the UK, EU, and many other countries. The invoice must show the supplier's VAT registration number, the customer's VAT number (for B2B sales between registered parties), each line item's VAT rate, the VAT amount, and the total inclusive of VAT. Specific format requirements vary by country but the structure is similar.

Who needs to issue VAT invoices?

Any VAT-registered business making taxable supplies. In the UK that's businesses over £90,000 annual turnover (or voluntarily registered below). In the EU, registration thresholds vary by country. In Canada and Australia the equivalent is GST/HST or GST. Once registered, every invoice for a taxable supply must be a VAT invoice (or simplified VAT invoice for small retail sales in some countries).

What VAT rate do I charge?

Depends on your country and what you're selling. UK standard rate is 20%; reduced rate 5% on energy/children's car seats; zero-rated 0% on most food, books, and exports; exempt for some services. EU member states have varying standard rates from 17% (Luxembourg) to 27% (Hungary). Reduced and zero rates differ per country. Issueable applies one VAT rate to the whole invoice (a second tax line would also apply to the whole invoice), so bill items at different rates on separate invoices.

How does reverse charge work?

For B2B sales between VAT-registered businesses in different countries (typically EU intra-community), reverse charge means the supplier charges 0% VAT and the buyer self-accounts in their country. Both VAT IDs must appear on the invoice along with a reference to reverse charge (e.g. "Reverse charge, Article 196 of EU Council Directive 2006/112/EC"). In Issueable, set VAT to 0%, enter both VAT IDs, and put the reverse-charge wording in the notes.

What about VAT on exports outside the EU/UK?

Generally zero-rated. Goods exported from the EU/UK to non-EU countries are zero-rated for VAT (0%); the importer pays VAT in their country. Services to non-EU customers can be zero-rated under place-of-supply rules; check your specific service and the customer's location. State "Zero-rated supply" or "Export of services" on the invoice and apply 0%.

Can I issue an invoice in a foreign currency and still call it a VAT invoice?

Yes, most countries allow invoicing in any currency. UK requires the VAT amount to be shown in GBP (or with GBP equivalent stated). EU member states have similar requirements for the local currency. State the exchange rate and date used. Issueable offers 15 common currencies; for cross-currency VAT invoices, note the rate in the notes section.

Do I need special software like Xero or QuickBooks for VAT invoicing?

Not just for invoicing. UK Making Tax Digital (MTD) requires digital record-keeping and VAT return submission via compatible software, but Issueable can produce the invoices and you import them into MTD-compatible software (Xero, QuickBooks, FreeAgent) for the actual return. Many sole traders use this lighter setup to avoid the £25-50/month subscription cost.

How long do I keep VAT invoices?

UK: 6 years. EU member states: 6-10 years (Germany 8 years for invoices and 10 for books, the Netherlands 7 years and 10 for real-estate records, France 10 years for invoices and books). Digital storage is accepted; PDFs work. Some EU countries have additional integrity requirements for VAT-deduction substantiation; check your country's rules. Issueable produces archive-friendly PDFs.