Debitoor's accounting dictionary
Modified invoice

Modified invoice - What is a modified invoice?

A modified invoice is a type of VAT invoice that includes the total price of the products and/or services inclusive of VAT.

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A modified invoice includes all of the same details as a normal VAT invoice but also includes the total amount including VAT.

Modified invoices are only issued on products and services with a total amount over £250 and must show the price of each product before VAT and inclusive of VAT, and the overall total amount including VAT. You must be a VAT-registered business to issue modified invoices.

UK legislation states that modified invoices can be issued if your customer agrees, meaning that your client doesn’t mind having the invoice include the total VAT amounts.

If different products on the invoice have different VAT rates, then you must break down the totals of each VAT rate (20%, 5%, 0%). Therefore, modified invoices include each product inclusive and exclusive price, as well as the VAT totals of each VAT rate (if there are different VAT rates on the invoice).

Modified invoices are generally issued by retailers as they usually sell products directly to consumers rather than other businesses.

How is a modified invoice different from a full invoice?

A full invoice is the standard invoice format which includes certain details such as an invoice number, buyer and seller details, the date, the products, the price, and VAT amount (if registered). You can see a full list of required details on our article on VAT invoices.

A full invoice can be issued for any amount, whereas a modified invoice is only issued for products and services totalling over £250.

The main difference between a full invoice and a modified invoice is that a modified invoice will include the price of products both inclusive and exclusive of VAT.

Here is a chart depicting the differences:

chart depicting differences between full and modified invoices

Here is an example of what a line on a modified invoice may look like:

modified invoice line example

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