An invoice is a request for payment. A VAT invoice is a specific legal document, and only a business registered for VAT can issue one. That distinction decides which rules apply to you, and it is where most of the confusion starts.
This guide covers what must appear on a UK invoice, what extra fields a VAT invoice needs, and the details buyers actually use to reject a bill. It is written for small businesses invoicing other businesses — the case where a missing field delays payment rather than going unnoticed.
Two documents, one word
If you are not registered for VAT, there is no statutory list of fields. You must not charge VAT, and you must not call the document a VAT invoice or show a VAT number you do not have. What you should still include is the information your customer needs to pay you and to file the transaction:
- the word Invoice, clearly
- your business name, trading name if different, and address
- a unique invoice number
- the date of issue
- the customer's name and address, and any purchase order reference they gave you
- a description of what you supplied, with quantities
- the amount due, and the currency
- payment terms, due date, and how to pay — bank details or a payment link
- any late-payment terms you intend to rely on
If you operate as a limited company, company law adds requirements independently of tax: invoices and order forms must show the company's registered name, its registered number, the place of registration (England and Wales, Scotland or Northern Ireland) and its registered office address. These come from the trading disclosures regulations, not from HMRC, and they apply whether or not you are VAT registered.
What a VAT invoice must show
Once you are VAT registered, a full VAT invoice needs all of the following. HMRC publishes the list in VAT invoices; the practical version is below.
| # | Field | What goes wrong |
|---|---|---|
| 1 | Your name, address and VAT registration number | VAT number missing or mistyped, so the customer cannot reclaim the VAT. |
| 2 | A unique, sequential invoice number | Duplicated numbers after a re-issue, which breaks the audit trail. |
| 3 | Date of issue | Backdating to the month the work was quoted rather than supplied. |
| 4 | Date of supply (the tax point) if it differs from the issue date | Omitted on invoices for work delivered in an earlier VAT period. |
| 5 | Customer's name and address | "Accounts payable" with no legal entity, which finance teams reject. |
| 6 | Description of the goods or services | "Consultancy" for three unrelated projects, so the buyer cannot code it. |
| 7 | Quantity of goods or services | Missing on day-rate invoices: state the days or hours. |
| 8 | VAT rate charged for each item | One blended rate where standard-rated and zero-rated items are mixed. |
| 9 | Unit price excluding VAT | A single inclusive figure, which forces the buyer to reverse-engineer the VAT. |
| 10 | Any discount offered, and its rate | Discount applied silently, so the VAT calculation does not reconcile. |
| 11 | Total excluding VAT | — |
| 12 | Total VAT to be paid | Shown as a percentage only, with no amount. |
| 13 | Total including VAT | — |
Two extras are not on the statutory list but prevent most queries: a purchase order number where the client uses one, and a payment due date calculated from your stated terms rather than left to the reader.
Checking the arithmetic before you send: the UK VAT calculator splits any total into net, VAT and gross at 20%, 5% or a rate of your own.
Simplified VAT invoices and retail receipts
For supplies to consumers where the total including VAT is £250 or less, a simplified VAT invoice is allowed. It needs your name, address and VAT number, a unique invoice number, the date of issue, the time of supply, a description of what was supplied, the total including VAT and the VAT rate charged. A till receipt with those details can serve as the invoice.
The £250 limit applies to the total including VAT, and it is not a licence to simplify business-to-business invoices — a company reclaiming VAT on a £90 purchase still needs enough detail to do so, and many accounts departments insist on a full invoice regardless of value.
Tax point, and when to invoice
The tax point is the date the supply is treated as taking place for VAT. It is usually the earlier of the date you issue the invoice or the date you receive payment, unless you supply goods before either. Getting it wrong shifts revenue between VAT quarters, which is a problem at a quarter boundary and a bigger problem if a customer has already closed their period.
Three practical habits avoid it:
- Invoice when the work is delivered, not when the month ends.
- If a client pays a deposit, issue an invoice for the deposit when it is received.
- Keep a credit note process. A credit note must reference the original invoice number, the reason for the credit, and the VAT adjustment.
Invoices for clients outside the UK
VAT on cross-border services follows the place-of-supply rules, not the customer's preference. For most business-to-business services supplied to a client in another country, the supply is outside the scope of UK VAT and the invoice shows no VAT, with a note that VAT is the customer's responsibility under the reverse charge. Keep evidence of the customer's business status and location — a VAT number or a registered address — because the zero-VAT treatment depends on it.
Consumer customers abroad are a different case, and digital services to EU consumers bring the One Stop Shop into play. If a meaningful share of your revenue is cross-border, this is worth fifteen minutes with an accountant rather than a paragraph on a website.
When you have to register for VAT
Registration is compulsory once taxable turnover goes over £90,000 in any rolling twelve-month period, and voluntary below that. The threshold is on taxable turnover, not profit, and it is measured over any twelve months, not the tax year — which is why businesses are caught out mid-year. HMRC keeps the current figure at VAT thresholds; check it before you rely on a number quoted in an article, including this one.
Crossing the threshold changes your pricing, your cash flow and your admin. The businesses that handle it well raise prices at the same moment they register, and tell retainer clients before the first VAT invoice rather than after.
Getting paid: the terms that actually help
An invoice that states terms and a due date is enforceable in a way that a polite request is not. For business-to-business debts in the UK, the late payment legislation gives you statutory interest at 8% above the Bank of England base rate, plus fixed compensation that scales with the debt: £40 for debts up to £1,000, £70 up to £10,000, and £100 above that. You do not have to claim it, but stating on the invoice that you will is the cheapest deterrent available.
Three lines on the invoice do most of the work:
- Payment due within 14 days of the invoice date. Fourteen days is a payment term, not a demand; thirty is common but slower.
- Statutory interest and compensation apply to overdue commercial debts.
- Please quote the invoice number with your payment.
If late payment is already a pattern, the fix is usually before the invoice: a purchase order number obtained at booking, an agreed approver named in the contract, and a reminder sent three days before the due date. The workflow in invoicing and getting paid covers the sequence.
Records to keep, and for how long
Keep copies of invoices you issue and receive for six years, along with credit notes, bank statements and anything that supports the VAT you charged. VAT-registered businesses must keep digital records and file through compatible software under Making Tax Digital. If HMRC asks a question, the burden is on you to show the supply happened and the VAT was calculated correctly.
The five-minute check before you send
- Invoice number unique and in sequence.
- Your VAT number present, if you are registered — and absent if you are not.
- Company name, registered number, place of registration and registered office, if you are a limited company.
- Customer's legal entity named, with a purchase order reference if they use one.
- Each line shows quantity, unit price excluding VAT and VAT rate.
- Subtotal excluding VAT, VAT amount, total including VAT.
- Due date and payment details, plus the late-payment line.
- Currency stated on every cross-border invoice, with the VAT treatment explained.
If you would rather not build the layout from scratch, the free UK invoice template contains these fields in the right order, with the VAT and late-payment wording already written.
