What must be on a UK invoice

What every invoice must show

Whatever kind of business you run, GOV.UK says an invoice must include (Invoices: what they must include):

• a unique identification number
• your business name, address and contact information
• the name and address of the customer you're invoicing
• a clear description of what you're charging for
• the date the goods or service were provided (the supply date)
• the date of the invoice
• the amount or amounts being charged
• the VAT amount, if VAT applies
• the total amount owed

A simple way to keep numbers unique is to run them in order, such as INV-0041 then INV-0042, and never reuse one, even for a cancelled invoice.

Extra rules for sole traders

If you're a sole trader, the invoice must also show (GOV.UK):

• your own name, and any business name you use
• if you trade under a business name, an address where legal documents can be delivered to you

So if Sam Patel trades as "Bright Lawns", the invoice shows both names, plus an address for legal documents.

Extra rules for limited companies

• Full registered name. Use the company name exactly as it appears on the certificate of incorporation, including "Limited" or "Ltd" (GOV.UK). The law lists invoices among the documents that must carry it (regulation 24 of the Names and Trading Disclosures Regulations 2015).
• Directors' names: all or none. You don't have to name your directors. If you name any of them, you must name all of them.
• Registered number, registered office and where you're registered. Business letters, order forms and websites must show the company's registered number, its registered office address, and the part of the UK it's registered in (England and Wales, Scotland or Northern Ireland). See GOV.UK: signs, stationery and promotional material and regulation 25. The rule names letters, order forms and websites rather than invoices, but many companies add these details to their invoices too, so one layout covers every document they send.

If you're not VAT registered

Only VAT-registered businesses can issue VAT invoices (VAT Notice 700/21, section 3.1). So if you're not registered, don't add VAT, don't show a VAT number, and call the document an invoice, not a VAT invoice. The rules above for every invoice, and for sole traders or companies, still apply.

You must register for VAT once your taxable turnover for the last 12 months goes over £90,000 (the threshold on GOV.UK when we checked). Once you're registered, the rules below apply.

If you're VAT registered: the full VAT invoice

If you're VAT registered and you sell standard or reduced-rate goods or services to another VAT-registered business, you normally must issue a VAT invoice within 30 days of the supply (VAT Notice 700/21, section 3.1). A full VAT invoice must show (VAT Regulations 1995, regulation 14):

• a sequential number, from one or more series, that uniquely identifies the invoice
• the time of supply (the tax point)
• the date the invoice was issued
• your name, address and VAT registration number
• the name and address of your customer
• a description that's enough to identify the goods or services
• for each description, the quantity or extent, the rate of VAT and the amount excluding VAT
• the unit price
• the total amount excluding VAT
• the rate of any cash discount offered
• the total VAT charged, in pounds sterling

Some invoices need a set wording too: "reverse charge" where your customer has to account for the VAT, and a margin scheme reference such as "margin scheme: second-hand goods" when you use one of those schemes. Regulation 14 lists them.

Invoicing in euros or dollars

The amounts can be in any currency, but the total VAT must also be shown in sterling (regulation 14(1)(l)).

Zero-rated and exempt sales

VAT Notice 700/21 (section 4.6) says you don't always need a VAT invoice if it's only for exempt or zero-rated sales within the UK. You still need an ordinary invoice to get paid and keep your records.

Simplified and modified VAT invoices

HMRC allows two shorter forms (VAT Notice 700/21, sections 4.4 and 4.5):

• Simplified VAT invoice: for supplies of £250 or less, including VAT. It shows your name, address and VAT number, the time of supply, a description of the goods or services, and for each VAT rate the total including VAT and the rate charged. Exempt supplies must not be included.
• Modified VAT invoice: where the charge is over £250, you must issue either a full VAT invoice or a modified one. A modified VAT invoice shows VAT-inclusive values instead of VAT-exclusive ones.

If you're not sure which one fits your business, read section 4 of the notice or ask an accountant.

Payment terms and late payment

Put your payment terms on the invoice, such as "payment due within 14 days". GOV.UK says that unless you agree a payment date, the customer must pay you within 30 days of getting your invoice or the goods or service (payment obligations).

If another business pays you late, you can charge interest, but you don't have to. Unless your contract sets a different rate, the statutory rate is 8% plus the Bank of England base rate (GOV.UK: interest on late commercial payments). A bill to change the late payment rules was going through Parliament when we checked, so look at GOV.UK before you rely on this.

How long to keep invoices

Keep a copy of every invoice you send and receive:

• VAT registered: generally at least 6 years (VAT Notice 700/21, section 2.4).
• Limited company: 6 years from the end of the last company financial year they relate to, or longer in some cases (GOV.UK).
• Sole trader: at least 5 years after the 31 January Self Assessment deadline for the tax year (GOV.UK).

If you send invoices every month, Munshian Ledger numbers them in order, emails them as PDFs, tracks who has paid, and puts the VAT onto your MTD VAT return. It's free.