Key Facts
- •Fount Construction Limited (FCL) appealed HMRC's disallowance of input tax recovery due to insufficient invoice descriptions.
- •The contested invoices from Landcore Limited described services as 'Building Works at the above' and included the job address.
- •HMRC argued the description was insufficient to verify details and assess VAT liability.
- •FCL argued a simple description was sufficient for invoice validity.
- •The total VAT amount in dispute was £15,218.59.
Legal Principles
Regulation 14(1)(g) and (h) of the Value Added Tax Regulations 1995 requires invoices to contain a description sufficient to identify goods or services and specify quantity/extent of services, rate of VAT, and amount payable.
Value Added Tax Regulations 1995, regulation 14(1)(g) and (h)
The level of detail required for invoice descriptions depends on the context of the supplied goods or services. A simple description may suffice for some services (e.g., professional services), while more detail may be needed for others (e.g., construction goods). Payment of an invoice without challenge is some evidence of sufficient description, but not conclusive.
Deadoc Construction Limited v HMRC [2015] UKFTT 0433 (TC)
The purpose of the invoice description is to ensure both parties understand the services invoiced for accurate VAT returns and to allow HMRC to understand the supply's nature and seek further information if needed.
This case's judgment
Outcomes
The appeal was allowed.
The Tribunal found that the invoices' descriptions ('Building Works' and the full site address) were sufficient to comply with regulation 14, as they identified the services and allowed HMRC to understand the nature of the supply and to make further inquiries if needed. The level of detail did not need to be sufficient for HMRC to independently assess the VAT treatment from the invoice alone.