Unauthorised issue of a VAT invoice

by Aitch, posted in Value Added Tax

Issuing a VAT invoice without registration or authorisation can lead to HMRC penalties, even if it is done by mistake.

A penalty may be charged by HMRC when an individual or business issues an unauthorised VAT invoice showing or including VAT without being allowed to do so. The invoice does not need to be a formal VAT invoice; it only needs to show an amount that is shown as VAT or includes an amount attributable to VAT.

An unauthorised person is anyone who is not registered for VAT, not part of a VAT group, or not otherwise authorised to act on behalf of a taxable person, such as an insolvency practitioner or an auctioneer selling goods to recover a debt. Common examples include businesses operating below the VAT registration threshold, individuals who issue VAT invoices after deregistration or businesses who begin charging VAT before being VAT registered. Farmers who are not certified to use the VAT agricultural flat rate scheme, but issue flat rate invoices may also face penalties.

A penalty may be avoided if the person has a reasonable excuse for the error. However, unauthorised issuing of VAT-related invoices is treated seriously and may result in financial penalties.

Source:HM Revenue & Customs | 15-09-2025
author avatar
Aitch
I'm Aitch, the Founder and CEO of CIGMA Accounting Ltd. As a Chartered Management Accountant and as a CIMA member, I've spent more than 16 years helping businesses, entrepreneurs, landlords, and individuals with tax planning, accounting, and HMRC compliance. As a chartered accountant in London, I'm passionate about making complex tax matters easier to understand and helping clients make confident financial decisions. Over the years, I've advised start-ups, SMEs, established companies, and high-net-worth individuals across a wide range of tax and accounting matters. My expertise includes Corporation Tax, Self-Assessment, Capital Gains Tax, Inheritance Tax planning, R&D tax relief, capital allowances, international tax, and resolving complex HMRC compliance issues. Whether clients need a business accountant, tax accountant, or strategic tax advisor, my focus is always on delivering practical advice that creates long-term value. One of my specialist areas is Making Tax Digital (MTD). I've worked extensively with businesses preparing HMRC's digital reporting requirements, helping them move to cloud accounting, improve financial processes, and adopt technology that makes compliance more efficient. I regularly speak at Making Tax Digital roadshows, industry events, and educational sessions in collaboration with Zoho Books, sharing practical insights into digital accounting, tax legislation, and the future of the profession. Many business owners looking for the best accounting firm in London are not simply searching for an accountant they're looking for trusted advice, responsive support, and long-term value. That's the approach I've taken in building CIGMA Accounting. My team and I work closely with businesses across London and the UK, providing accounting services, tax advisory, bookkeeping, payroll, VAT, company accounts, and strategic tax planning tailored to each client's goals. Through this website, I share practical guidance on UK taxation, Making Tax Digital, HMRC updates, Corporation Tax, Self-Assessment, and business finance. My aim is to provide reliable, straightforward information that helps business owners understand changing regulations, reduce compliance risks, and make informed financial decisions with confidence.
See Full Bio