Purchase invoices describing a supply simply as ‘building works’, along with giving the site address, provided sufficient detail to comply with the VAT regulations and allow input VAT recovery.
- In Fount Construction Limited v HMRC [2024] TC09144, the company sought to recover input VAT totalling £15,219 on three invoices from Landcore Limited.
- The invoices:
- Gave the description 'Building Works at the above', with the building site address stated in a separate box.
- Included a VAT-exclusive subtotal, the VAT amount calculated at the Standard rate, and the overall total.
- HMRC denied recovery of the input VAT stating that the invoices did not meet the Invoicing requirements of the 1995 Value Added Tax Regulations, by failing to give:
- A description sufficient to identify the Goods or services supplied.
- For each description, the quantity of the goods or the extent of the services, the rate of VAT and the amount payable, excluding VAT, expressed in any currency should be included.
- Fount Construction Limited Appealed to the First Tier Tribunal (FTT).
The FTT found that:
- The purpose of the description required by the VAT regulations was twofold:
- To enable both the recipient and supplier of the supply to have a common understanding of the services that the invoice relates to.
- To provide HMRC with a means of understanding the essential nature of the supply and a means of identifying the supply in correspondence with the recipient or the supplier, to seek more information as needed.
- The invoice description does not need sufficient detail to enable HMRC to draw definitive conclusions on its VAT treatment.
- HMRC have wide-ranging powers to seek further information relating to a supply. The invoice is merely the gateway into enquiries by HMRC.
- A general and short description of the nature of the services, such as 'Building Services', along with further identifying information such as the name of the site, the contract, or the date of works, is sufficient to meet Invoicing requirements.
- The invoices issued by Landcore Limited contained a description of the services (Building Works) and the full address of the site: the invoices were therefore compliant with regulation 14 of the VAT regulations.
The appeal was allowed.
Useful guides on this topic
Input VAT: What constitutes a valid claim (& VAT invoice)?
What is Input VAT? Who can claim it? What is needed for a valid claim? What needs to be included on a VAT invoice and can you make a claim without one?
Land & Property VAT at a glance
A summary of VAT on common land and property transactions.
CIS: Construction Industry reverse charge
What is the CIS VAT reverse charge? How do you account for VAT? Can you still cash account for VAT? What administrative changes do I need to operate the reverse charge?
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