What a UK invoice must include
There is no government-issued invoice form in the UK, but a valid invoice has to carry a standard set of details so that both you and your customer have a clear, traceable record of the transaction. The single most important field is a unique, sequential invoice number: every invoice you raise must have its own number, and the numbers should follow on from one another with no gaps. This lets you and HMRC trace each sale, and it stops the same invoice being paid or recorded twice.
Alongside the number, a UK invoice needs your business name and address, the customer’s name and address, the date of the invoice (and the supply date if it differs), a clear description of the goods or services supplied, the quantity and unit price where relevant, and the total amount due. If you charge VAT, the invoice also has to show the VAT details covered further down. Including your payment terms and how the customer should pay you is not legally required, but it removes ambiguity and tends to get you paid faster.
The word “invoice” should appear on the document so it is not mistaken for a quote, an estimate, or a delivery note. Keeping the layout consistent from one invoice to the next also makes your records easier to reconcile at year end and easier for an accountant to work with.
Sole traders vs limited companies
The core invoice fields are the same whether you trade as a sole trader or through a company, but limited companies have to disclose more. If you operate as a sole trader, you invoice under your own name; you may also use a trading name, but if you do, you must still show your own name and an address where legal documents can be served. There is no requirement to register or display a company number, because there is no company.
A limited company must show its full registered company name exactly as it appears at Companies House. While the company number and registered office address are not legally required on every sales invoice, it is standard and good practice to include the company registration number and the registered office, because UK rules already require those details on business letters, order forms and websites, and customers and their accountants expect to see them. If the company is VAT registered, its VAT number must appear on VAT invoices.
Whichever structure you use, keep your invoicing consistent with how you are registered. Sole traders should keep business and personal records separate even though the law does not force a separate legal entity, and companies should make sure the name on the invoice matches the registered name rather than a shortened version.
When you have to charge VAT
Whether you add VAT depends on whether you are VAT registered, not on your business structure. You must register for VAT once your taxable turnover passes the VAT registration threshold, which is GBP 90,000 (the figure that applies from April 2024), measured over any rolling 12-month period. You can also register voluntarily below that level if it suits your business. Until you are registered, you simply do not charge VAT.
If you are not VAT registered, you issue a simple invoice with no VAT: list your prices, total them, and do not add a VAT line or a VAT number, because you do not have one. It is worth knowing that you must not show or charge VAT if you are not registered, as that would be misleading. Many sole traders and small businesses operate this way for years and never cross the threshold.
Once you are VAT registered, you must issue a full VAT invoice for standard taxable supplies to other businesses. A VAT invoice has to show your VAT registration number, the VAT rate applied to each item, the amount of VAT charged, and both the net (pre-VAT) and gross (VAT-inclusive) totals. The standard UK VAT rate is 20%, with reduced and zero rates for certain goods and services. The specific layout, the rules for reduced-rate and zero-rated supplies, simplified VAT invoices for small amounts, and how to handle EU and overseas customers are covered in our dedicated UK VAT invoice guide.
Payment terms and late payment
Set out your payment terms clearly on every invoice: when payment is due (for example, “payment due within 30 days” or a specific due date), how the customer should pay you, and your bank details for a transfer. If you do not agree a payment period with a business customer, the default under UK law is that payment becomes due 30 days after the customer receives the invoice or the goods or services, whichever is later.
When a commercial customer pays late, the Late Payment of Commercial Debts (Interest) Act 1998 gives you a statutory right to charge interest and to claim a fixed amount of compensation for recovering the debt. Statutory interest is set at 8% plus the Bank of England base rate on business-to-business debts, and you can also claim a fixed recovery charge that rises with the size of the debt. These rights apply automatically to commercial transactions even if you did not mention them, although many businesses state them on the invoice as a reminder.
Keep a copy of every invoice you issue. UK businesses generally need to keep their records for at least six years, and VAT-registered businesses must keep VAT records and, in most cases, follow Making Tax Digital rules for VAT. Numbering your invoices sequentially and storing them in one place makes this straightforward and means you can always answer a query or an HMRC request quickly.
UK invoicing questions
What does a UK invoice need to include?
A UK invoice needs a unique sequential invoice number, your business name and address, the customer’s name and address, the invoice date, a clear description of the goods or services, the quantity and unit price where relevant, and the total amount due. If you are VAT registered it must also show your VAT number, the VAT rate, the VAT amount, and the net and gross totals.
Do sole traders need to register for VAT to send invoices?
No. Sole traders and small businesses can send invoices without being VAT registered, and they do so with a simple invoice that has no VAT line. You only have to register for VAT once your taxable turnover passes the registration threshold of GBP 90,000 over a rolling 12-month period, although you can register voluntarily below that if it suits you.
What is the UK VAT registration threshold?
The UK VAT registration threshold is GBP 90,000 of taxable turnover, the figure that applies from April 2024, measured over any rolling 12-month period. Once your turnover passes this level you must register for VAT and start issuing full VAT invoices. Below it you can stay unregistered and issue invoices with no VAT, or register voluntarily.
Does a limited company have to show its company number on invoices?
A limited company must show its full registered company name as held at Companies House. The company registration number and registered office are not strictly required on every sales invoice, but they are required on business letters, order forms and websites and are standard good practice to include, so most companies show them on invoices too. If VAT registered, the VAT number must appear on VAT invoices.
Can I charge interest on a late invoice in the UK?
Yes. For business-to-business debts the Late Payment of Commercial Debts (Interest) Act 1998 gives you a statutory right to charge interest at 8% plus the Bank of England base rate, plus a fixed compensation amount for recovering the debt. These rights apply automatically to commercial transactions even if your invoice did not mention them.
How long should I keep my UK invoices?
UK businesses generally need to keep their invoices and other business records for at least six years. VAT-registered businesses must keep VAT records and, in most cases, follow Making Tax Digital rules for VAT. Numbering invoices sequentially and storing copies in one place makes it easy to meet these requirements and answer any HMRC query.