A commenter left this note on one of our recent articles, 10 Items That Belong on Your Commercial Invoices : “Nice overview of elements of a commercial invoice. I was glad to see the interesting note on the whether or not to include HS numbers. This is coming up more and more with clients.” Her comment gave me a thought: As a rule, I encourage exporters to include Harmonized System (HS) numbers on their commercial invoices. Correctly applied, HS numbers can help ensure your exports make it through customs without delay and get delivered to their final destinations, which can help you get paid faster. However, as the reader noted, while most businesses consider it a best practice to include HS numbers on their commercial invoices, there are certain situations where including a HS number could actually backfire. I've come up with two reasons why you might not want to include HS numbers on your invoices: 1. Your Importer Asks You to Use a 10-Digit Code While your custom...
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A commercial invoice is a formal request of reimbursement by the seller to the buyer. For your export shipments, it can serve several added functions: The destination country requires it before clearing the goods through customs. If there is an insurance claim on the shipment, it serves as a key supporting document. The buyer uses it to release funds through its bank to the seller. A bank examines it before reimbursing funds under a letter of credit or documentary collection. U.S. export regulations require that exporters retain it for five years from date of shipment. Exporters can use it to support foreign credit risk insurance claims. In order to meet all these requirements, the commercial invoice needs to include, but is not limited to, items in the checklist below and will mirror the details specified in the quotation, purchase order, and order acknowledgement. A commercial invoice is not a proforma invoice, which is a preliminary invoice. A proforma invo...
When a UK business sells goods overseas, to avoid charging UK VAT, the UK business must obtain and keep proof of export (also called ‘evidence of removal from the UK’). HMRC recommend: “A combination of these documents must be used to provide clear evidence that a supply has taken place, and the goods have been removed from the UK: the customer’s order (including customer’s name, VAT number and delivery address for the goods); inter-company correspondence; copy sales invoice (including a description of the goods, an invoice number and customer’s EC VAT number etc.); advice note; packing list; commercial transport document(s) from the carrier responsible for removing the goods from the UK, for example an International Consignment Note (CMR) fully completed by the consignor, the haulier and signed by receiving consignee; details of insurance or freight charges; bank statements as evidence of payment; receipted copy of th...
The tax point (or ‘time of supply’) for a transaction is the date the transaction takes place for VAT purposes. You need to know this because, for example: it’s included on VAT invoices it tells you which VAT period the transaction belongs to it tells you which VAT Return to put the transaction on The tax point can vary, but is usually the following. The date of supply is: for goods - the date they’re sent, collected or made available (eg installed in the customer’s house) for services - the date the work is finished Source: https://www.gov.uk/vat-record-keeping/time-of-supply-or-tax-point
If you have switched to the Standard Rate VAT scheme, from previously opting out of the Flat Rate VAT scheme, there are benefits of doing so. You may be obliged to remain registered for VAT to be compliant for VAT purposes - there is a mandatory requirement to be registered for VAT if your turnover is above £85,000 (from April 2017). Being VAT registered also provides assurance to any interested parties that you have a robust accounting framework in place on order to meet your financial responsibilities. HOW DO I CALCULATE MY VAT LIABILITY? You will continue to charge VAT on the services you provide, however, the amount you pay over to HMRC VAT will be your sales VAT less any VAT on your business expenses. If a purchase is also for personal or private use, you can only reclaim the business proportion of the VAT. WHAT ARE THE RULES WHEN CLAIMING VAT ON YOUR BUSINESS EXPENSES? Firstly, the goods or services you purchase must be for bu...
Original Excerpt from Schedule of records and information needed for visit: Please make sure that the records and information we need to see are available for the visit. They must cover the whole period from 1 March 2016 to 31 March 2018. The records and information we need to see are: Annual accounts Business bank statements VAT account and any related working papers Accounting books, for example, sales and purchase daybooks, cash books and petty cash books Sales and purchase invoices Documents such as contracts and correspondence relating to sales Your VAT registration certificate if this is your first VAT visit The certificate of incorporation for limited companies if this is your first VAT visit We may also ask to see your records from earlier VAT periods if we think it is necessar y.