A VAT invoice is a standard invoice with extra information added: your VAT registration number, the VAT rate charged on each item, the VAT amount, and the net (pre-VAT) and gross (total) figures shown separately. You only need to issue one once you are VAT registered.
What a valid UK VAT invoice must show
A unique, sequential invoice number
The invoice date and the date of supply (the "tax point"), if different
Your business name, address and VAT registration number
Your customer's name and address
A description of the goods or services
The rate of VAT charged on each item (standard, reduced, or zero-rated)
The VAT amount per rate, and the total VAT charged
The net total (before VAT) and the gross total (including VAT)
A worked example
Say you invoice £500 of standard-rated labour and £50 of zero-rated materials on the same job. The invoice should show the £500 line with 20% VAT (£100), the £50 line with 0% VAT (£0), a net subtotal of £550, total VAT of £100, and a gross total of £650 - each rate broken out separately, not blended into one VAT figure.
Simplified VAT invoices
For sales under £250 including VAT, HMRC allows a "simplified" VAT invoice with less detail - you can skip the customer's name and address and just show a single VAT-inclusive total per rate, rather than net and VAT broken out separately. Most invoicing software, Invoito included, defaults to full VAT invoices since they work for every transaction size, simplified or not.
Why a spreadsheet template struggles with this
The moment an invoice mixes VAT rates - standard-rated labour alongside zero-rated materials, say - a hand-built spreadsheet formula has to be edited per invoice or it silently applies one rate to everything. Invoito calculates VAT per line automatically, so a mixed-rate invoice comes out correct without you touching a formula.
What is the difference between an invoice and a VAT invoice?
A standard invoice shows what is owed. A VAT invoice additionally shows your VAT registration number, the VAT rate per item, the VAT amount, and net/gross totals - required once you are VAT registered.
Do I need a VAT invoice for every sale?
Can a VAT invoice include items at 0% and 20% VAT together?