For VAT-registered businesses, recovering VAT on eligible business expenses is an important part of managing costs and maintaining healthy cash flow. To support these claims, HMRC generally requires businesses to keep a valid VAT invoice as evidence of the purchase.
However, invoices aren’t always issued correctly. If a supplier provides an incomplete or inaccurate VAT invoice, does that mean you can no longer reclaim the VAT? Fortunately, not necessarily. In some cases, other supporting evidence may be enough to support a valid VAT claim.
A recent tax case provides useful guidance.
What Is a Valid VAT Invoice?
A full VAT invoice should include:
- The supplier’s name and address
- The supplier’s VAT registration number
- A unique invoice number
- The invoice date
- The customer’s name and address
- A description of the goods or services supplied
- The VAT rate charged
- The net amount, VAT amount, and total amount payable
If any of this information is missing or incorrect, the invoice may not fully comply with HMRC’s VAT requirements.
Common Examples of Invalid VAT Invoices
A VAT invoice may be considered invalid if it:
- Omits the supplier’s VAT registration number.
- Does not show the VAT amount separately.
- Contains insufficient details about the goods or services supplied.
- Includes incorrect dates, values, or customer information.
Another common issue is where an invoice is issued in the name of a company director or employee instead of the VAT-registered business that actually made the purchase.
Athena Luxe Ltd v HMRC [2025]
In Athena Luxe Ltd v HMRC [2025] UKFTT 1507 (TC), Athena Luxe Ltd purchased luxury goods from UK suppliers and exported them overseas. As most of its sales were zero-rated exports, the company regularly reclaimed VAT on its purchases.
Following a VAT inspection, HMRC disallowed some of the company’s input VAT claims because certain invoices lacked sufficient descriptions of the goods purchased, while others were issued in employees’ names rather than the company’s name. One supplier also refused to issue corrected invoices.
The First-tier Tribunal found in favour of Athena Luxe Ltd. It confirmed that HMRC should consider all available evidence before rejecting a VAT claim. Where invoices were incomplete, matching till receipts helped demonstrate that the purchases had been made. For invoices issued in employees’ names, the Tribunal accepted that the company had genuinely purchased the goods, paid for them using company funds, and had made reasonable efforts to obtain corrected invoices.
The Tribunal concluded that HMRC had acted unreasonably by refusing to consider alternative evidence.
Please note: This was a First-tier Tribunal decision. While it provides useful guidance, it is not legally binding on future cases.
Alternative Evidence May Support a VAT Claim
If you are unable to obtain a fully compliant VAT invoice despite making reasonable efforts, HMRC may accept other evidence that demonstrates VAT was genuinely incurred on business purchases.
Supporting evidence may include:
- Bank statements
- Payment confirmations
- Purchase orders
- Contracts
- Delivery notes
- Till receipts
- Email correspondence
- Expense claim records
Keeping these records can strengthen your position if HMRC questions your VAT claim.
E-Invoicing and VAT Compliance
The UK government is encouraging greater use of electronic invoicing as part of its wider plans to modernise the tax system and improve VAT compliance. Electronic invoices are created and exchanged in a structured digital format, making them easier for accounting software to process and reducing the risk of missing or incorrect information.
Although e-invoicing is expected to become more common, there is currently no confirmed legal requirement for all UK VAT-registered businesses to use mandatory e-invoicing from a specific date. Businesses should continue to monitor future HMRC announcements and prepare for any changes that may be introduced.
Frequently Asked Questions (FAQs)
1. Can I reclaim VAT if my invoice is incomplete?
Yes, in some cases. While HMRC generally expects a valid VAT invoice, it may accept alternative evidence if you can demonstrate that the VAT was genuinely incurred for a business purchase and you have made reasonable efforts to obtain a corrected invoice.
2. What information must a valid VAT invoice contain?
A valid VAT invoice should include the supplier’s name and address, VAT registration number, invoice date, unique invoice number, customer details, a description of the goods or services, the VAT rate, the VAT amount, and the total amount payable.
3. What should I do if my supplier issues an incorrect VAT invoice?
Contact the supplier as soon as possible and request a corrected VAT invoice. This is the best way to ensure your VAT claim meets HMRC’s requirements.
4. Can HMRC reject a VAT claim because of an invalid invoice?
HMRC may refuse a VAT claim if there is insufficient evidence. However, it cannot automatically reject a claim solely because an invoice contains errors if other reliable evidence proves the business transaction took place.
5. What alternative evidence can support a VAT claim?
Useful supporting evidence includes bank statements, payment confirmations, purchase orders, contracts, delivery notes, till receipts, email correspondence, and expense claim records.
Final Thoughts
If you receive an invoice containing errors, contact your supplier as soon as possible and request a corrected VAT invoice.
While HMRC may accept alternative evidence in certain circumstances, relying on its discretion is not ideal. Keeping complete and accurate records, including invoices, receipts, payment records, contracts, and correspondence, will help support your VAT claims and reduce the risk of disputes during an HMRC compliance check. Whether you need support with VAT registration, VAT returns, VAT compliance, or dealing with HMRC, we’re here to help.
Get in touch today for expert VAT advice and keep your business compliant with confidence.