Quotation before the work, invoice on supply, receipt when payment clears. Each covers one event and does not substitute for the others; the common confusion costs the customer because a document HMRC reads as a receipt cannot be used to reclaim input VAT.

Horizontal timeline of UK trade documents. Stage 1 quotation: pre-work price and scope, not legally binding, validity 14 to 30 days. The customer accepts, triggering stage 2. Stage 2 invoice: issued once goods are supplied or services performed; VAT-registered suppliers must include the Regulation 14 mandatory fields; issued within 30 days of the tax point. Payment clears, triggering stage 3. Stage 3 receipt: confirms payment received; not a VAT document on its own; closes the audit trail. — Each document covers one event. The £250 till-receipt exception (simplified-invoice rules) is the one place receipt and invoice merge into a single document.

Quotation vs invoice vs receipt at a glance

	Quotation	Invoice	Receipt
When it is issued	Before the work or supply	Once goods supplied or services performed	When payment clears
What it does	Offers a price and scope; binds nobody until accepted	Demands payment for a defined supply	Confirms payment received
Statutory format	None	Regulation 14, VAT Regulations 1995 for VAT-registered suppliers	None
VAT-relevant?	No	Yes: input VAT recovery flows from the invoice	No on its own (supports the audit trail)
Issuance window	Validity often 14 to 30 days	Within 30 days of the tax point	On request when payment lands
What it proves	Agreed scope and price	VAT declared or reclaimable	Payment was made

Retention: 5 years for sole traders (after the 31 January Self Assessment deadline), 6 years for limited companies and for all VAT records.

What about the £250 simplified-invoice exception?

For retail sales of £250 or less including VAT, the simplified-invoice rules let the supplier drop the customer name and address and skip a separate VAT breakdown. The till receipt at a supermarket meets this standard and functions as both receipt and VAT invoice. For sales above £250 the till receipt alone is not enough; the supplier must issue a full invoice on request. The full Regulation 14 checklist covers the threshold edge cases.

How does HMRC read these in an enquiry?

Invoices verify output VAT declared on the supplier side and input VAT reclaimed on the customer side. Receipts corroborate that the invoice was paid; bank-statement evidence is preferred, with receipts closing the loop on cash transactions. Quotations rarely surface unless a dispute exists about scope or price. Records under VAT Notice 700 and Companies Act 2006 section 388 form the basis of the audit trail.

How to Choose Between a UK Quotation, Invoice, and Receipt

Pick the right document at each stage of a UK supply: quotation before work begins, invoice on supply, receipt on payment. Apply Regulation 14 to the invoice, keep retention to the 5-year sole-trader and 6-year company windows.

Identify where you are in the supply sequence

Before any work or supply happens, you are at the quotation stage. Once goods are supplied or services performed, you are at the invoice stage. Once payment lands, you are at the receipt stage. Each document covers one event and does not substitute for the others.

Issue a quotation for the pre-work price

State the price, scope, and validity window (commonly 14 to 30 days). Make clear whether the figure is net or gross of VAT. A quotation is not a tax document and carries no statutory format. It becomes a contract when the customer accepts it.

Issue a Regulation 14 VAT invoice on supply

For VAT-registered suppliers, a full invoice carries eleven fields: unique sequential number, date, supplier name and VAT number, customer name, supply description, line items with rates and net amounts, total VAT in sterling, gross total. Issue within 30 days of the tax point unless HMRC has agreed a longer period.

Use the simplified-invoice rules for retail sales £250 or less

For retail sales of £250 or less including VAT, the simplified invoice drops the customer name and address and allows the VAT-inclusive total without a separate breakdown. The till receipt at a supermarket checkout meets this standard. For sales above £250, the supplier must issue a full invoice on request.

Issue a receipt when payment lands

Show date of payment, amount, method (cash, card, bank reference, cheque), what the payment was for (the invoice number it settles), supplier name, and a unique receipt number. A receipt is not by itself a VAT document, so customers reclaiming input VAT still need the invoice.

Retain all three for the right window

Sole traders keep records for 5 years after the 31 January Self Assessment deadline. Limited companies keep records for 6 years from the end of the financial year under section 388 of the Companies Act 2006. VAT-registered businesses keep VAT records for 6 years. Inadequate records on a Compliance Check trigger penalties under FA 2008 Schedule 41.

Quotation, Invoice, or Receipt: Which UK Document Do I Issue?