Brexit and valid vat invoices?

Does a vat invoice have to be in sterling to be a valid vat invoice?

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No according to the vat helpline following Brexit you just convert it -fair enough and they have given me a case number for me to quote. But see notice 700 16.3.1...... 'the amount of vat chargeable this must be expressed in sterling'. The guidance 'Transactions in foreign currencies and vat' also states that the amount of vat needs to be shown in sterling. So should we go back to the supplier and ask for a valid vat invoice. The suppliers do have a GB valid vat registration number but all amounts are shown in euros?

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By Jason Croke
26th Jul 2021 13:13

You are right, where UK VAT is being charged, the invoice must show values in either sterling or show a exchange rate. So you could have an invoice entirely in Euros but with with a 1.13 exchange rate showing or the invoice could have a separate paragraph where it says the sterling equivalent ix £x net and £x VAT.

Otherwise, the invoice sounds invalid. On an invoice showing €100 net and €20 VAT you cannot reclaim VAT in anything other than sterling, so the issue is if you use a different exchange rate to that of the supplier, there will be a difference between what the supplier declared to HMRC and what you will reclaim (ie, supplier converts €20 euros into GBP and declares £19.80 to HMRC but by time you process the invoice in your accounts the VAT may be £19.50 or even £20.20 and so HMRC either lose or gain and that is why invoices are supposed to have an exchange rate or a separate line for GBP.

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Replying to Jason Croke:
By Di
26th Jul 2021 13:57

Thankyou that is what I thought. The advice line said it had changed since Brexit but would not refer me to any guidance so I could check, but gave me a case number and said I could rely on that reference. I suppose I will have to go back to the supplier to ask for a valid vat invoice.

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Replying to Di:
By Jason Croke
26th Jul 2021 14:08

That's quite scary (HMRC helpline) but not unexpected.

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