UK invoice template for sole traders and the self-employed

Not VAT registered or VAT registered

VAT, or value added tax, is the tax a business adds to its prices and pays over to HMRC, the UK tax authority. Whether your invoices show it comes down to one question: are you registered for VAT? Most sole traders and self-employed people start out unregistered, because registration only becomes compulsory once taxable turnover passes the threshold in the table above. Until then you send a plain invoice with no VAT on it, and once you register, you add VAT to your prices and your invoices become VAT invoices, with a longer list of required details.

The threshold isn't checked once a year at tax return time, which is why a few busy months can catch you out. A new business uses the normal test: at the end of each month, add up taxable turnover for the last 12 months or less and register if it is over £90,000, or when you expect turnover in the next 30 days alone to go over £90,000. You can register voluntarily, even before you start selling. If you take over a business that was (or should have been) VAT registered, its taxable turnover in the 12 months before the transfer counts too. In practice it's worth keeping a running total of your sales and checking it at every month end, and watching for a single large contract that could take you over on its own.

Staying unregistered comes with one strict rule, and registering brings a related one. Only a VAT-registered business may issue a VAT invoice: if you are not registered you must not show VAT, and if you do, HMRC can charge a penalty of up to 100% of the VAT shown and still collect that amount from you. If a VAT invoice shows more VAT than is due, you must pay HMRC the higher amount unless you correct the error with your customer by issuing a credit note. So if you're not registered, don't add a VAT line, don't describe your prices as including VAT, and don't copy a template from a VAT-registered friend. Once you are registered, the VAT shown on an invoice is VAT owed, so check the sums before you send it.

What an invoice without VAT must show

An invoice from a sole trader who isn't VAT registered is the simplest kind of UK invoice, but it still has to identify you, your customer and the sale clearly enough for both of you to account for it. If you're self-employed and not registered, this is the list to check your invoice against:

• A unique identification number
• Your company or 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 services were provided (supply date)
• The date of the invoice
• The amount(s) being charged
• The total amount owed
• Sole traders: your name and any business name you use, and, if you use a business name, an address where legal documents can be delivered to you
• Limited companies: the full company name as on the certificate of incorporation; if you show any directors' names, show all of them
• No VAT and no VAT number: only a VAT-registered business can issue a VAT invoice, and showing an amount as VAT (or as including VAT) when not registered can bring a penalty

Two of these are easy to get wrong. The supply date is when you actually did the work or delivered the goods, which often isn't the day you write the invoice: if you finished a set of photographs on 28 March and invoice on 3 April, the invoice shows both dates. The business name rule matters if you trade under a name that isn't your own, because an invoice from "Harbour Design" alone doesn't tell the client who they have a contract with, so it also needs your own name and an address where legal documents can reach you.

No special wording is required on an invoice without VAT, as the table above says, but many sole traders add one short line near the total: Not registered for VAT. It costs nothing, and it tells a client's accounts team that the missing VAT is deliberate rather than an oversight. Your price is simply your price, so three days at £150.00 a day comes to £450.00, and that is the total owed.

The unique number at the top of the list applies to every invoice, registered or not. Every invoice needs a unique identification number, and a VAT invoice needs a sequential number, from one or more series, that uniquely identifies it. A plain running sequence such as 2026-001, 2026-002 meets both versions of the rule, so if you start that way you won't have to change anything when you register. The guide to invoice numbers explains the usual schemes.

What a VAT invoice must show

A VAT invoice has more work to do than an ordinary one, because a VAT-registered customer relies on it for its own VAT return, so every figure on it has to be traceable. That's why the list is longer and more exact. Once you're registered, these are the details to check each VAT invoice against:

• A unique invoice number that follows on in sequence (you may use more than one series)
• The time of supply (tax point)
• The date of issue, if different from the time of supply
• Your name, address and VAT registration number (if you trade under another name, also the name and address you are VAT-registered under)
• Your customer's name and address
• A description that identifies the goods or services
• For each line: the quantity of goods or extent of services, the VAT rate and the amount excluding VAT
• The unit price (for countable goods or services, such as an hourly rate)
• The total amount excluding VAT
• The rate of any cash discount offered
• The total VAT charged, in pounds sterling (even if the invoice is in another currency)
• Zero-rated or exempt items: show clearly that no VAT is due on them, with a separate total
• Limited companies: the full company name as on the certificate of incorporation; the company number, registered office and part of the UK must be on business letters, order forms and websites — invoices aren't named there, but an invoice sent as a letter may count as one, so show them
• Sole traders using a business name: also your own name and an address where legal documents can be delivered
• Your contact details
• The total amount owed

The time of supply, often called the tax point, is the date the sale counts as having happened for VAT purposes; when you write the invoice on a different day, the invoice shows both. Your VAT registration number goes on every VAT invoice, in the format shown in the table above. Each line also carries its own VAT rate, which matters as soon as one invoice mixes items at different rates, because zero-rated or exempt items need their own total so the customer can see where no VAT applies.

The lower rates in the table apply only to particular goods and services named in the VAT rules, and some sales are exempt or outside the scope of UK VAT altogether, such as most services to a business client abroad (the first question below explains when). Otherwise, each line carries the standard rate of 20%. Say you invoice a client for 12 hours of bookkeeping at £45.00 an hour. The line shows 12 hours, a unit price of £45.00, the VAT rate and £540.00 excluding VAT, and below it come the total excluding VAT, VAT of £108.00 and a total owed of £648.00. If you bill in euros or dollars, the VAT total must still appear in pounds sterling as well, which the questions below explain.

Payment terms and late payment

Your payment terms are whatever you agree with your client, and the invoice is where you put them in writing, either as a due date or as a period such as 14 days from the invoice date. Writing them down matters, because if you agree nothing the law fills the gap, and its default may be longer than you'd like. If you agree no payment date, a business customer's payment is late 30 days after it gets your invoice (or after you deliver, if that is later); agreed terms between businesses should usually be no more than 60 days, and longer only if fair to both. On a late payment you can claim statutory interest of 8% above the Bank of England base rate (unless your contract sets a different rate) plus a fixed £40, £70 or £100 for a debt under £1,000, from £1,000 to under £10,000, or £10,000 or more (Late Payment of Commercial Debts (Interest) Act 1998).

Two things follow for your invoices. Put a clear due date on every one, so the date you agreed applies rather than the default, and keep your terms within the limit in that rule unless a longer period is fair to both of you. You never have to claim interest or compensation, but a line in your terms saying you may claim them on overdue invoices often gets a slow payer moving. These rules cover business customers, so if you work for private individuals, agree the terms before you start and write them on the invoice all the same.

If terms like Net 30 are new to you, the guide to payment terms explains the common ones and how to word them. In the maker you set a due date on each invoice and mark it as sent and then paid, so the overview shows which invoices are still outstanding. Once an invoice is past its due date, the maker marks it as overdue and drafts a payment reminder you can send from it, but nothing goes out on its own, so deciding when to chase is still your job; the guide to payment reminders suggests wording and timing.

Making, keeping and sending your invoices

Opening the maker from this page sets it up for the UK, with the invoice in English, prices in GBP, A4 paper and the standard VAT rate preset on each line. You enter your business details once, including your own name, any trading name, your address and your VAT registration number if you have one. If you're not VAT registered, use the maker's VAT exemption setting, which is meant for businesses that charge no VAT, and no VAT will appear on the invoice. Each line takes a quantity, a unit such as hours or days, and a price, and the invoice number counts up automatically and never reuses a number; the guide to making an invoice walks through each step.

When it's ready, you can download the PDF or print it without an account, and a free account also lets you email it with the PDF attached, or send a link to a page where the client can view and download it, up to 10 invoices a month. Keep a copy of every invoice you send, because HMRC can ask to see the records behind your tax return and, once you're registered, your VAT returns. The records behind your tax return can need keeping for longer than the period in the table above, so check with your accountant before you throw any away. Without an account this browser keeps up to 3 invoices or quotes, so download each PDF and file it somewhere safe. An invoice you send from the maker or mark as sent is locked, but one you download and send yourself stays an editable draft until you mark it, so the PDF you actually sent is your best record, and the CSV export and quarterly VAT summary give your accountant the figures without retyping.

For now a PDF invoice is allowed in the UK, but the PDF the maker produces is not an e-invoice, which is a structured data file that the customer's accounting software reads directly, sent over a network such as Peppol. The table above shows when e-invoices become compulsory for VAT-registered businesses, and the requirement has clear limits. The April 2029 requirement covers only VAT invoices between VAT-registered persons in the UK: invoices from businesses that are not VAT-registered, invoices to consumers, sales that need no VAT invoice (exempt, zero-rated or out of scope) and cross-border sales are not covered, though e-invoices may be sent voluntarily. A narrow exemption for digitally excluded VAT-registered persons (for example because of age, disability, where they live or no internet access) is planned, with details due by April 2028. So if you're not VAT registered, the change won't touch you. If you're VAT registered but only bill private clients or clients abroad, the invoices you issue aren't covered, but you'll still need to be able to receive e-invoices from your VAT-registered suppliers. If you're VAT registered and bill other VAT-registered UK businesses, you'll need software that issues e-invoices before that date, because this maker doesn't.