Legal emailed invoices
We operate an electronic invoicing system in accordance with VAT Notice 700/63.
Normally, we email invoices. Just occasionally we will be told in no uncertain terms that You cannot legally send invoices by email, or There is a legal requirement to post invoices or invoices must be on paper. These complaints usually happen once someone has received emailed invoices, ignored them, and then been charged a late payment penalty (applicable to commercial contracts).
We take some care to ensure that we are doing everything correctly, and we are quite happy to be corrected. If we are doing something wrong, please do tell us. However, in this case, nobody has been able to actually back up any of their claims of it not being perfectly valid and legal to send invoices by email. If you believe we are doing something wrong, please cite your references so that we can check them.
We have gone to some trouble to make our emailed invoices easy to use. The main features are:-
- Invoice contains a plain text version so can be read with any email client
- We also attach a PDF version which allows the full colour letterhead to be viewed or printed. The software to view and print PDFs is readily and freely available for all popular platforms.
- Invoices are digitally signed to ensure they are unchanged and genuinely from us. The software to check such signatures is readily and freely available for all popular platforms.
- We also provide an on-line secure web page https://accounts.aa.net.uk/ which allows you to view the invoice on a web page, or get a copy of the PDF version.
- The plain text, PDF, and html versions of the invoice include all of the details required for issue of a formal VAT invoice.
- We can even attach an XML format document to the invoice for automated processing if you wish.
H M Revenue & Customs have requirements for what constitutes a VAT invoice. As a VAT registered company we have a legal requirement to issue VAT invoices on request to a VAT registered person to which we are supplying services. The requirements are detailed in the VAT guide which can be obtained from http://www.hmrc.gov.uk/. These do not require the invoice to be on paper. We have confirmed with H M Revenue & Customs that our invoices meet the necessary criteria and that emailed invoices are valid. VAT Notice 700/63 covers new regulations that came in to force Jan 2004, and confirm that not only are electronic invoices valid but that we should not store or send paper invoices if we operate a system of electronic invoicing. As we use a digital signature, our electronic invoices are also valid throughout the EU.
There are also requirements that we have to meet before we can issue a late payment penalty under the Late Payment of Commercial Debts (Interest) Act 1998. However, these requirements are quite low and simply require that you are made aware of the amount of the debt. If we have emailed the invoice then you are aware of the debt, so there is no doubt that late payment penalties can be applied whatever you think of the validity of emailed invoices.
Schedule 11 section 3(1) of the Value Added Tax Act 1994 states: "For the purposes of any provision contained in or having effect under this Act which relates to VAT invoices a person shall be treated as issuing, or as providing another person with, a VAT invoice if the requisite particulars are recorded in a computer and transmitted by electronic means and without the delivery of any document" which makes it very clear that electronic invoices are completely valid, as confirmed by HMRC.
We note that section 13A of The Value Added Tax Regulations 1995 as added by section 5 of The Value Added Tax (Amendment) (No. 6) Regulations 2003 and as modified by section 2(4)(b) The Value Added Tax (Amendment) (No. 3) Regulations 2012 states "The document is not to be treated as the VAT invoice required to be provided by the supplier under regulation 13(1) unless the use of the electronic invoice is accepted by the customer" which appears to contradict scheduled 11 section 3(1) of the Value Added Tax Act 1994. The Act trumps the SI as it is the Act which gives the SIs power in the first place. Even if that were not the case, accepting electronic invoices is part of our terms, and if you don't accept them, you are welcome to request a paper copy for a fee.
Your accountant insists
We do have some sympathy for accounts staff that are stuck with an accountant or a director insisting that Invoices must be on paper or must arrive by post. In such cases, we would suggest you politely ask for the reference. You will be able to do your job much better if you know exactly which law or legislation states this as you can then avoid a long argument with us.
We also understand that a lot of people are happier with paper. Indeed, we still keep paper copies of invoices we receive filed away for the accountant and VAT inspections. We receive a lot of emailed invoices from suppliers and we simply print them and treat them much the same as a paper invoice arriving in the post. So, if your systems need a paper copy, then feel free to print the invoice. We have had the comment why do you expect me to print them? - the answer is simple, we don't! It is your accounts processes that are expecting a paper copy. We are not expecting or requiring you to print the invoice at all - we simply require that it is paid, on time.
As it says in our terms - the formal invoice is the plain text in the email we send you. If you really want, you can print it. You could even post it to yourself (well, one person insisted invoices must arrive by post!). If you want us to print and post an invoice, we will charge an admin fee. If you think that is not reasonable, see if you can find someone else who is prepared to print and post the invoices for you, and we'll happily email the invoices to them instead.
Can't open attachments
We normally include a PDF copy of the invoice in your email. PDF is a portable document format, and readers are available for windows, MAC, linux and other platforms. The readers are free of charge and can be downloaded from the internet. See http://www.acrobat.com/ for more details, although other makes of reader are also available.
If you can read the plain text invoice but not the attachment, then there is no problem as the plain text contains all of the details required for a formal invoice. It simply does not look as nice.
Some mail systems reject our invoices claiming they have a virus or are indeterminate content. The PDFs we send do not contain any sort of virus. PDFs are designed so that they cannot contain a virus anyway (though it does not harm to ensure your reader software is up to date). This is your choice to reject the email, and is no different in principle to your being sent an invoice by post but rejecting it because of the colour of the envelope. The invoice has still been issued and so must be paid.
However we can change the invoicing to be plain text only if you wish. This means you do not get the nice PDF attachment, but you can still get that off our on-line accounts web pages if you like. Please ask our accounts department if you need your invoicing changed to plain text only.
We can also provide invoices in an XML format from our web site or as an additional attachment on the emails if you wish. This is useful for itemised telephone and text bills, for example. It allows you to process the information electronically with suitable systems. We may change the format from time to time though.
Wrong email address
We take some care to ensure that email addresses are correct, and when ordering services on-line we do not re-type the email address at all in the process. Occasionally people change email address and don't tell us. This is no different to changing postal address and not telling people who post you invoices. If we have sent the invoice to the last notified email address, we consider you notified of the debt. Please make sure you tell use any change of email address promptly.
Occasionally we will be given an email address of an individual, and they leave the company. Again, this is no different in principle to having an individuals name on posted invoices. Generally, if a company gets post for a former employee then they check the post and would not discard invoices received. The same is true for email. Another problem with invoices to an individual is when that individual is sick or on holiday. Both of these problems can be solved by simply having an accounts email address. You can then control who gets the emails and change this when someone leaves or is sick, etc. This is the same as postal invoices being addressed to "Accounts" and not an individual. If you need help setting up an email alias like this, do talk to us as we do provide internet services.
Still want us to post an invoice
We will, for an admin fee of £5.00+VAT, post a copy of invoices should you insist, but only in response to a specific request on each occasion.
Need us to send the invoice in some other way
If you need us to submit the invoice in some other way, such as posting to some on-line form, we will happily do so. Again the admin fee of £5.00+VAT applies for each occasion. Plus, if you (or some third party) charge us for doing this we will add that amount to your invoice as an additional cost we have in supplying service to you as a further admin fee.
If you have suggestions as to how we can improve our invoicing, or you think we are doing anything wrong, please do contact us.