Keeping VAT records
HM Revenue and Customs (HMRC) may check your records to make sure you’re paying the right amount of tax.
Records you must keep
You must keep a record of the following:
- everything you buy and sell (including zero-rated, reduced and VAT exempt items)
- copies of all invoices you issue
- all invoices you receive (originals or electronic copies)
- self-billing agreements (where the customer prepares the invoice)
- the name, address and VAT number of any self-billing suppliers
- debit or credit notes
- any goods you give away or take from stock for your private use
Keep general business records such as bank statements, cash books, cheque stubs, paying-in slips and till rolls.
Find out what records you must keep when you export goods.
Records you must keep digitally
You must keep some VAT records digitally – unless you’re exempt from following Making Tax Digital for VAT rules.
Keep digital records of the following:
- the VAT on goods and services you supply (supplies made)
- the VAT on goods and services you receive (supplies received)
- the ‘time of supply’ and ‘value of supply’ (value excluding VAT) for everything you buy and sell
- any adjustments you make to a return
- reverse charge transactions – where you record the VAT on both the sale price and the purchase price of goods and services you buy
- any VAT accounting schemes you use
- your total daily gross takings if you use a retail scheme
- items you can reclaim VAT on if you use the Flat Rate Scheme
- your total sales, and the VAT on those sales, if you trade in gold and use the Gold Accounting Scheme
Keep digital copies of documents that cover multiple transactions made on behalf of your business by:
- volunteers for charity fundraising
- a third party business
- employees for expenses in petty cash
How to keep digital records
Use a compatible software package or other software (like spreadsheets) that connect to HM Revenue and Customs (HMRC) systems.
If you use more than one software package to keep records and submit returns, you need to link them.
Some ways you can link your software include:
- using formulas to link cells in spreadsheets
- emailing records
- putting records on a portable device to give to your agent
- importing and exporting XML and CSV files
- downloading and uploading files
This lets you submit your business’s VAT return online.
You do not need to scan paper invoices or receipts.
When you’re exempt from keeping digital records
You must follow the rules for ‘Making Tax Digital for VAT’ by keeping some records digitally, unless:
- your business uses the VAT GIANT service, for example if you’re a government department or an NHS Trust
- you’re eligible for an exemption
How long you must keep records
Begin keeping records when you register for VAT. You must keep VAT records for at least 6 years (or 10 years if you are using the VAT One Stop Shop (OSS) scheme or used the VAT Mini One Stop Shop (MOSS) scheme).