What is a VAT Receipt?

Since it was first introduced, VAT has become an integral part of our lives as consumers and business owners. While there are a few items and services that are exempt from VAT charges, chances are that your last transaction featured a VAT charge. 

Even though we come into contact with it every day, many people know very little about VAT and VAT receipts. We hope to help with that by talking about what VAT and VAT receipts are and why they’re important in this blog. 

What is VAT? 

VAT stands for value added tax. In very basic terms, it is a general consumption tax based on the value of the goods and services supplied to the customer. While it usually is a blanket tax for transactions, there are a few items and services that don’t require a VAT charge. 

Under UK law, all businesses are required to register for VAT if their taxable turnover goes over £90,000 in any rolling 12-month period. This threshold increased from £85,000 to £90,000 on 1 April 2024, and has remained unchanged since, including through the 2025 and 2026 budgets. (If you haven't registered your business yet at all, see our guide on how to register a UK business.) You also have the option to register voluntarily if you wish, even if your turnover is below the threshold; in fact, around 41% of VAT-registered UK businesses currently sit below the mandatory limit, often for the credibility or reclaim benefits it brings. There are a few benefits that come with being VAT registered, including:

• VAT refunds - Once you’re registered, you can claim VAT returns on all the taxable items and services you purchase for your business. This can be of huge financial help to businesses that operate on a tight budget.
• A VAT registration number - As a VAT-registered business, you’ll be given a special number that denotes your registered status. If you operate a smaller business, this can give you a greater air of credibility and help you build your reputation. 
•  Reclaim past VAT - In addition to the VAT returns on your business expenses, you can be eligible to reclaim up to four years worth of past charges. The amount you can claim depends on how long you’ve been in business. You’re also required to have the invoices and receipts that show the amount you’ve paid. 

TIP: Explore everything you need to know about reverse charge VAT with our latest blog. Whether you're in construction, real estate, or curious about VAT regulations, this comprehensive guide tailored for UK readers will clarify the ins and outs of this crucial tax provision.

Can I get a VAT exemption?

VAT applies at different rates depending on what you're selling, and it's worth knowing the difference between "zero-rated" and "exempt" — they both mean no VAT is charged to the customer, but they're treated differently for your own VAT accounting.

Zero-rated goods and services are still part of the VAT system, just taxed at 0%, which means you can still reclaim VAT on related business costs. Examples include:

• Cold takeaway food, as long as it's not eaten in a designated area on the premises (hot food and anything eaten in is always standard-rated)
• Children's clothing and footwear (under set size guidelines)
• Most printed books, newspapers, and leaflets

Exempt goods and services sit outside the VAT system entirely, meaning you can't reclaim VAT on related costs. Examples include:

• Sporting activities run by eligible non-profit or public bodies
• Lottery tickets
• Charity fundraising events, subject to specific conditions
• Financial and insurance services

Unless they trade zero-rated goods or services, both retail and hospitality business owners should be conscious of VAT requirements. Every so often, the government will introduce VAT changes. It’s good practice to familiarise yourself with VAT and VAT receipt rules so that you know you’re covered. 

What is a VAT receipt? 

Simply put, a VAT receipt is a receipt issued to the customer by a VAT-registered business. Generally, they will show the details of the transaction, including the time it was made, the amount of VAT charged, and will have the issuing business’s VAT number on the receipt. VAT receipts can be in either electronic or paper format. 

While these receipts may not be particularly important to the average person on the street, they are vital for businesses invoicing their suppliers. For companies to claim back the VAT on goods and services they’ve bought for the business, they must supply a valid VAT receipt. 

You may be thinking, “Can you claim VAT without a receipt?” The short answer is no. It’s worth noting that letters of intent, delivery notes, and email correspondence do not count as a VAT receipt. 

What’s included on a VAT receipt? 

For businesses looking to claim back VAT on their purchases, their submitted receipt must include: 

• A unique invoice number
• The date the invoice was issued
• The seller’s name or business name with their address
• The seller’s VAT number
• The tax date 
• Your name and business address 
• A description of the goods or services provided to you 

If any of this information is missing or incorrect, your claim on VAT could be rejected. By taking the time to look over your invoices properly, you can save yourself a financial hit and a future headache. 

Simplified receipts 

For some businesses, it can be difficult and impractical to include all the required information on their receipts. When this is the case, some businesses can provide what are called simplified VAT receipts, for any transaction totalling £250 or less (including VAT). Above this amount, a full VAT invoice is required instead.

These shorter receipts have less information on them but still provide the customer with everything that is legally required. The information included on these simplified receipts is as follows:

The seller’s business name and address

• The seller’s VAT number
• An invoice number
• The date of the transaction or the date the goods or service was provided
• A description of the goods or services 
• The transaction total and the VAT
• The VAT rate charged per item

The average person on the street is much more likely to be provided with a receipt like this. These receipts are most commonly issued in retail and hospitality businesses. 

Example: a simplified VAT receipt

It's one thing to read a list of required fields, and another to see them laid out on a real receipt. Here's an example of a simplified VAT receipt once everything's filled in:

The Corner Café 14 High Street, Manchester, M1 2AB VAT Reg No: GB 123 4567 89

Date: 18/08/2026

1 x Flat White - £3.20 1 x Bacon Roll - £4.50

Total (inc. VAT): £7.70 VAT rate: 20%

Notice what's there: business details, VAT number, date, itemised description, and the VAT-inclusive total. Notice what's missing — customer details, the net breakdown, and a line-by-line VAT amount. That's not an oversight; it's exactly what keeps this format quick for low-value sales. Above £250, you'll need a full VAT invoice instead.

One trap to watch for: a card machine slip alone rarely counts as valid evidence, since it usually lacks a VAT number or itemised breakdown.

What’s the law around VAT?

Under UK law, any VAT-registered businesses must provide their customers with a VAT receipt. If a supplier fails to supply you with a VAT receipt, you are legally allowed to request one. Your customers are also entitled to a VAT receipt if you fail to provide one. 

In addition to this, all VAT-registered businesses must keep a log of their transactions and their purchases. By law, you are required to keep these records for at least six years. These records must be kept in good condition, so it may be worth investing in a filing system. Make sure you keep them safe and organised so that they can be easily accessed. 

EPOS that can handle VAT 

Now that you have a better understanding of VAT receipts, it's worth knowing how much of this your till can handle automatically. Epos Now calculates VAT on every sale, tracking different rates item by item, even within the same basket, useful if you sell a mix of standard-rated and zero-rated goods. Everything's accessible from the cloud-based Back Office, so your bookkeeper can pull VAT-period figures at month-end without being on-site. It also integrates directly with QuickBooks and Xero, syncing sales and expenses automatically rather than requiring manual entry.

With Making Tax Digital requiring VAT-registered businesses to keep accurate digital records, having this handled automatically is less a nice-to-have and more a practical requirement. If you’d like to hear more about how Epos Now can improve your business, get in touch below.