When you’re making purchases for goods and services, make sure you get a receipt or invoice for the items you’ve bought.
Having this proof of payment is vital when claiming back your VAT.
- For purchase below £250, any till receipt is fine. You just need a VAT number on the receipt.
- For purchases over £250, you need a proper VAT invoice with all the right details (as detailed above).
The VAT amount must be broken out on the invoice, so you can clearly see the net total (before VAT), the VAT that’s been added and the gross total you’ve paid.
So if net total was £100, you’d pay £20 in VAT and the gross total paid would be £120. You can then claim back that £20 on your next VAT return.
Make sure you keep a record of all invoices and receipts for 6 years. These can be digital receipts, so a smart-scanning app, like Receipt Bank, can be used to scan in and digitise your documents and pull them into cloud accounting software such as Xero online accounting.
If you’re unsure what VAT documentation you need, please do give us a call on 01454 300 999, or drop an email to info@fd-works.co.uk
Find out more about the FD Works’ approach to finance at fd-works.co.uk