What HMRC actually requires from your business invoices
If HMRC opens a VAT enquiry or tax review, your invoices are the evidence. Get them right and it's routine; have gaps and it's a problem. This guide covers what a valid invoice must contain, how long to keep them, and the digital-record rules now that Making Tax Digital applies.
This is general guidance, not tax advice — confirm your obligations with HMRC or your accountant.
What a valid VAT invoice must include
A full VAT invoice must show all of the following. If any of these fields are missing, you may not be able to use the document to reclaim VAT or support an expense in an HMRC review.
Invoice number A unique, sequential invoice number that identifies this document clearly.
Supplier details The supplier's business name, address, and VAT registration number.
Dates The invoice date and the tax point (time of supply), if different from the invoice date.
Customer details The customer's name and address.
Description A clear description of the goods or services supplied.
Line items For each line: quantity, unit price, VAT rate, and amount excluding VAT.
Totals The total amount excluding VAT, the total VAT charged, and the gross total.
Discounts Any cash discount rate offered.
Simplified and modified VAT invoices
Not every transaction needs a full VAT invoice. For retail supplies under £250, HMRC generally accepts a simplified VAT invoice with fewer fields — typically the supplier's name and VAT number, the date, a description of the goods or services, and the VAT-inclusive total. This covers most everyday purchases where a full invoice would be impractical.
For supplies over £250, a full VAT invoice is normally required. However, where both parties agree, a modified VAT invoice showing VAT-inclusive values can be used instead. This is common in certain B2B arrangements where the supplier and customer have agreed to treat the invoice differently — but the agreement must be in place before the supply is made.
If you're unsure which type applies to a particular transaction, check HMRC's current guidance or ask your accountant. Using the wrong invoice type won't always cause problems, but it can if HMRC questions a specific reclaim.
How long to keep invoices in the UK
You must generally keep VAT records and invoices for 6 years. That includes both the invoices you issue and the ones you receive — HMRC can ask to see them long after the transaction itself is forgotten.
For businesses within Making Tax Digital, records must be kept digitally and returns filed through compatible software. A paper-only shoebox no longer meets the standard. Digital storage is fine — and in most cases preferable — as long as the records are complete, accessible, and retained for the full period.
The most common gap in an HMRC review
In practice, the problem is rarely a badly-formatted invoice — it's a missing one. A payment left your account, but the invoice supporting it was never captured. That undercuts a VAT reclaim and leaves a hole in your records.
The fix is to reconcile every payment against its invoice, routinely, rather than hunting at year-end. PaperHound automates this: it checks your Xero bank feed, flags any payment with no invoice behind it, and finds the document in your email.
Frequently asked questions
What must a UK invoice include for HMRC?
For VAT-registered businesses, a full VAT invoice with the fields listed above; non-VAT businesses still need clear records of income and expenses.
How long do I keep invoices in the UK?
Generally 6 years, kept digitally if you're within Making Tax Digital.
What happens if I'm missing an invoice at a VAT review?
You may be unable to reclaim the VAT on that expense and could face questions about your records — which is why complete capture matters.
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