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How To Invoice If You Are Not VAT Registered

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Last editedApr 20232 min read

If your business is small, you might be wondering – can I invoice without a VAT number? Not all businesses in the UK are required to register for VAT, which means that many will send an invoice without VAT included. However, there are some rules to be aware of to ensure your business doesn’t fall on the wrong side of HMRC regulations. Find out how to invoice if you are not VAT registered below, as well as when VAT should be considered.

Can I invoice without a VAT number?

Invoices help your business get paid, and they must show key details including prices, invoice numbers, and payment information to facilitate this process. If a business has not registered for VAT, it will have no VAT number or requirement to include this on the invoice.

While any business can choose to register for VAT, it’s only compulsory if your business has an annual turnover of £85,000 or higher. You can register on the HMRC website, where your business will be issued a unique VAT number. With this number in hand, you’ll then be required to issue VAT invoices to customers, showing extra details about the tax rates and due dates.

So, can you issue an invoice without a VAT number? Yes – but only if your business is not VAT registered.

Can you charge VAT if not VAT registered?

What if you intend to register for VAT in the future? Can you charge VAT if not VAT registered just yet? The answer to this question is no, and the rules are quite clear on this issue. According to the Finance Act of 2008, businesses that issue an invoice showing VAT when they are not registered are liable to pay a penalty up to 100% of the amount shown on the invoice. Even an error could lead to penalties, so you should take care to leave VAT off your invoices entirely if you’re not registered.

How to invoice if you are not VAT registered

Creating an invoice without VAT is simple. Issue an invoice using the template or software of your choice, leaving out VAT details. Typical information contained in this type of invoice includes:

Business name and contact information
Client name and contact information
Unique invoice number
Issue date and due date
Itemised list of services or products provided and their costs
Total cost
Payment terms and conditions

One thing to keep in mind is that the invoice shouldn’t be labelled as a ‘tax invoice’ or ‘VAT invoice’. Similarly, VAT should not be charged or added onto the price of each listed product.

Collecting invoice payments then works the same with or without VAT added. It’s possible to streamline the process using GoCardless, which enables businesses to collect both one-off and recurring invoice payments. Payments are taken directly from customers’ bank accounts for greater control over timings and due dates, minimising issues with late payment for less stress all around. It’s also quick and easy to set up, without any associated fees, with or without VAT included.

Invoicing without VAT: example

If you use invoicing or accounting software, you’ll find a selection of templates to follow. It’s also easy to find an invoice without VAT example in everyday programs like MS Word and Excel. Most invoicing software allows you to choose whether your business is VAT registered in the settings. Deactivate VAT as an option and it shouldn’t appear on the template. Alternatively, if you use a template showing ‘VAT No.’ you can leave this field blank.

If your business is new and you haven’t had the chance to register for VAT just yet, you can still issue an invoice without VAT. Once you’ve registered with a valid number, change your profile settings to include this information on each invoice.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.