VAT Invoice Worked Example
This fictional example demonstrates arithmetic and checking method only. It does not decide whether a real supply is taxable or which VAT treatment applies.
Scenario
A VAT-registered design business invoices another UK business for two workshop sessions at £300 each and one preparation service at £150. The fictional example assumes all three lines use the standard 20% rate.
Line totals
Two sessions multiplied by £300 produce £600. One preparation service at £150 produces £150. Keeping quantity, description and unit price visible makes the £750 subtotal reproducible.
VAT calculation
VAT is £750 multiplied by 20%, producing £150. The gross amount due is therefore £900. If a system rounds per line, reconcile each displayed VAT amount to the chosen documented approach.
Required context
Arithmetic alone is not a complete invoice. Include a unique sequential number, supply and issue dates, supplier and customer identities, supplier VAT number, sufficient descriptions, rate, net amounts and total VAT in sterling.
Evidence pack
Retain the agreement, delivery or acceptance evidence, the issued invoice and the accounting entry. HMRC explains that VAT invoices are important business records and copies of issued VAT invoices must be retained.
What the example cannot decide
Special schemes, mixed rates, reverse charges, discounts, deposits, foreign-currency treatment and cross-border supplies can change both wording and calculation. Verify the current rule when any of these applies.