Two ECJ judgements have highlighted the importance of suppliers drafting invoices so as to meet requirements, thereby allowing customers to recover the VAT paid.
In Senatex, the Court confirmed that the VAT authorities were correct to disallow VAT recovery where supplier invoices were incomplete; in this case missing VAT numbers. However, it also ruled that where the customer was able to obtain the missing information, the original VAT claim should be allowed.
In Barlis, the description of legal services provided was insufficient. Simply stating ‘legal services’ and not including a start date gave the authorities grounds to reject the associated VAT claim. However, where the authorities have access to additional information to confirm the missing details, VAT recovery should be allowed.
Conclusion: Customers should seek fully compliant VAT invoices from suppliers to avoid rejection of input tax claims. However, where invoices are rejected, HMRC should accept additional evidence provided.