Simplified invoice

What it means

A simplified invoice is a tax document with a reduced set of particulars: it need not identify the customer or show the unit price and the taxable amount split by rate. It covers an e-kasa receipt, a fuel pump receipt and an invoice below the ceiling set by the VAT Act.

It is not a second-class document: the input VAT deduction from it is full, provided the supply was received and used for business. The ceiling is measured on the price including tax, differs for a till receipt and for an ordinary invoice, and no longer turns on how the customer paid.

A reduced set of particulars does not mean any scrap of paper will do. A simplified invoice must still show the supplier’s VAT number, the date, the kind of goods or service and the tax amount, or the data from which it can be worked out. A card terminal slip is not such a document: it proves a payment, not a supply, and gives no right to deduct.

How it works in practice

Above that ceiling a till receipt is no longer a simplified invoice and the supplier has to issue a full tax document carrying the customer details. Ask for it at the counter: months later the seller can no longer tie the buyer to the transaction.

In the control statement simplified invoices go in as one aggregate figure. Once the total deduction taken from simplified invoices in a tax period reaches the statutory threshold, the totals have to be broken out under each supplier’s VAT number.

Most simplified invoices clients bring in are for fuel, parking and small materials. When posting them we check that the receipt carries the seller’s VAT number and that the purchase relates to the business. Supermarket groceries do not go into costs even when the director slips them in with the company documents, and we tell the client why.

What to watch out for

Thermal paper receipts fade to blank within about two years. At an audit three years on there is nothing to produce, the tax office disallows the deduction and assesses the tax with interest although the purchase was entirely legitimate. Scanning at posting takes a minute and saves the whole amount.

When fuel is paid with a fuel card, the company also receives a summary invoice for all the fill-ups at month end. If both the receipts and the invoice are posted, the VAT and the cost are counted twice. At an audit the gap shows up against the supplier’s control statement and the company repays the deduction with interest.