Q: I am a self-employed plasterer and I was wondering how I go about writing a receipt for somebody after I have finished a job.
Aug 05 2008
Answered by: Clive Lewis Ask a question
You do not state whether you are VAT registered or not. If you are VAT registered you must comply with the VAT rules regarding the content of sales invoices.
Businesses must register for VAT when their turnover (or sales) reaches £67,000 (in 2008/9) in the preceding 12 months. Businesses must start keeping records and charging VAT to your customers from the date of compulsory registration which is usually the month after your annual turnover exceeded the threshold.
For details on what a “VAT Invoice Should Look Like” (for when you have been notified of your VAT registration) check out Business Link where you will also find an example of a simple VAT invoice.
General Regulation 14 (S1 1995 No 2518) sets out the rules relating to the content of VAT invoices.
General Regulation 16 provides for less detailed invoices for retailers where the consideration for the supply does not exceed £250.
You should show cash discounts on a VAT sales invoice and VAT should be calculated on the amount net of the cash discount. Information on the contents of a VAT invoice is also available on the HMRC website.
If you are not VAT registered you should use a prenumbered invoice pad. You should retain a copy of each invoice raised enabling you to account for all invoices. If you cancel an invoice, the cancelled document should be left in the pad. This will help you/ your accountant account for all your sales income.
Invoices should contain:
- The business name and the proprietors’s name if different
- The business’ address
- The date of sale or completion of the work
- A description of the work carried out
- Reference to any estimates, quotes or corresponence
- The selling price of your services
- The total amount payable
- The terms of payment. Whether you allow any period of credit
- Any discount for prompt payment
If you comply with the above your customers should be clear on your terms of trade.
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