VAT registered businesses should use sequential invoice numbers

Before this date, there was an existing requirement for all VAT invoices to have an identifying number, but now businesses should be aware that they need to comply with the more precise requirements.

Although HMRC said they were very unlikely to issue penalties for non-compliance with the new rules for the first year, that period is now over.

Here are some FAQ's, issued by HMRC, to help get your head round the new sequential numbering requirements:

Does the invoice number series have to be numerical, or can it include letters?

The ‘invoice number’ can be numerical, or it can be a combination of numbers and letters, as long as it forms part of a unique and sequential series.

In order to avoid the appearance of having only just started in business I do not want to start at Invoice no.1 and would prefer to commence with, say, Invoice no 1135. Is this allowed?

Yes, as long as the invoice series runs consecutively from that point.

I currently use a unique customer reference number as the identifying number on the invoice. If I add an additional consecutive number will this be acceptable?

Yes, this would have the affect of creating a unique and sequential series.

I have several customers and I wish to run several separate sequences of invoices at the same time. Is this possible?

Yes, it is acceptable to operate more than one sequence at the same time.

My business operates as several separate business units or divisions. Is it possible for each unit or division to operate its own sequence of invoices?

Yes, it is acceptable to operate more than one sequence at the same time.

What if there is a break in sequence, for example where I cancel an invoice or it is spoiled and never issued to a customer?

As long as you retain the cancelled or spoiled invoice in your accounting records, or you can provide an explanation for the break in sequence, this is acceptable.

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