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HMRC have published a summary of responses to the technical note on changes to VAT-invoicing rules.
They have effect from 1 January 2013 and were necessary to make UK legislation compliant with the EU VAT invoicing directive, the aim of which is to help simplify and harmonise existing regulations among member states, remove legal obstacles to the use of electronic invoices, and reduce administrative burdens on EU businesses in meeting their obligations.
Individual member states can no longer impose additional conditions on taxpayers wishing to use electronic invoicing; individual businesses can decide the method used and the only condition is that the customer must agree to the use of electronic invoicing.
Current EU VAT law permits a member state to release a VAT-registered firm from the requirement to issue a VAT invoice for an exempt supply made in its territory.
The UK has already adopted this relaxation, so there is no requirement to issue a VAT invoice for an exempt supply made within the UK.
The change to existing rules means there will no longer be a requirement for a UK supplier making exempt insurance or financial services supplies to a customer in another member state to issue a VAT invoice.
All VAT-registered businesses will be able to use a simplified invoice when they make a supply in the UK to a taxable person where the value of the supply does not exceed £250.
The rules on the time limits for issuing a VAT invoice have been aligned, and the amended UK regulations will require the invoice to be issued by the 15th day of the month following that in which the goods are removed or the services performed. This will reduce the timescale for UK businesses to issue a VAT invoice in some cases.
