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Businesses are allowed (and required) to deduct the VAT they pay on investments and expenses. However, this applies only if, and to the extent that, the purchases are used for VAT-taxable supplies. Furthermore, they must meet a number of strict formal conditions.<\/p>\n
Perhaps the best-known formal condition for claiming VAT deduction is that the business must hold a valid invoice; commonly referred to as a \u201cVAT invoice\u201d. You can find the requirements that a VAT invoice must meet in our guidance note The invoice for VAT purposes<\/a>.<\/p>\n This note explains, amongst other things, that a simplified invoice is sufficient when:<\/p>\n A simplified invoice only needs to include a limited amount of information. A simple receipt often qualifies as a simplified VAT invoice.<\/p>\n A business owner claiming a VAT deduction must also prove that the supplies listed on a (simplified) VAT invoice were provided to them; that they are the recipient of those supplies. The name on the invoice is an important indication of this.<\/p>\n A simplified VAT invoice usually does not include the name of the recipient, which means that proof must be provided in another way to show that the services were purchased by the business. Such proof can often be provided, for example, by showing that the costs were paid from the business\u2019s bank account.<\/p>\n\n
Customer<\/h4>\n
No receipts<\/h4>\n