UK Invoice Requirements: What the Law Says
In the UK, invoice requirements are set by HMRC and vary depending on whether you are VAT registered and whether you work under the Construction Industry Scheme. Getting the details right matters — incorrect invoices can delay payment and cause problems at tax time.
Standard Invoice Checklist (Non-VAT Registered)
For a sole trader or limited company not registered for VAT, every invoice must include:
- [ ] The word "Invoice" (clearly labelled)
- [ ] Your name and address (or business name and address)
- [ ] Client's name and address
- [ ] A unique invoice number (sequential)
- [ ] The invoice date
- [ ] A clear description of services or goods supplied
- [ ] The total amount charged
- [ ] Payment terms (e.g., "30 days from invoice date")
- [ ] Your bank details (account name, sort code, account number)
VAT Invoice Checklist
If you are VAT registered (turnover above £90,000, or voluntarily registered), you must issue a VAT invoice for every taxable supply. In addition to the standard fields above, include:
- [ ] Your VAT registration number (format: GB 123456789)
- [ ] The VAT rate applied to each item
- [ ] The net amount (before VAT) per line
- [ ] The VAT amount per line
- [ ] The total net amount (sum of all net amounts)
- [ ] The total VAT amount
- [ ] The total gross amount (net + VAT)
- [ ] Tax point date (usually the invoice date, but can differ for certain supplies)
Simplified VAT Invoices
For supplies under £250 (including VAT), you can issue a simplified VAT invoice that only needs:
- Your name and address
- Your VAT registration number
- The tax point date
- Description of goods/services
- VAT rate
- Total amount including VAT
CIS Invoice Checklist
For subcontractors working under the Construction Industry Scheme, add these fields:
- [ ] Your UTR number (10-digit Unique Taxpayer Reference)
- [ ] Labour and materials as separate line items
- [ ] The CIS deduction rate (0%, 20%, or 30%)
- [ ] The CIS deduction amount (rate × labour only)
- [ ] The net payable amount (invoice total − CIS deduction)
What Makes a Good Invoice Description?
The description of work is where many invoices fall short. Vague descriptions cause queries and delay payment. Compare:
| Vague | Better |
|---|---|
| "Construction work" | "Brickwork — Phase 2, Plots 7-12, Riverside Close development" |
| "Plumbing" | "First fix plumbing — 3-bed new build, 14 Oak Avenue, units 1-4" |
| "Labour" | "Electrical installation — commercial office fit-out, Level 2, Crown House" |
A good description answers: what did you do, where, and for which project?
Invoice Date vs Tax Point
For most sole traders, the invoice date and the tax point are the same. The tax point determines which VAT period the supply falls into — important if you are on accrual accounting for VAT.
If you deliver goods or services in one month but issue the invoice in the next, the tax point is normally the delivery date, not the invoice date. For most service businesses, this distinction rarely matters.
What About Credit Notes?
A credit note is issued to reduce or cancel a previously issued invoice. It must reference the original invoice number and clearly state the reason for the credit. Credit notes should be numbered separately from invoices (e.g., CN-001).
Proforma Invoices
A proforma invoice is a preliminary document sent before the actual supply, often used to request a deposit or confirm the price. It is not a VAT invoice and does not create a tax point. Once the work is done, issue a proper invoice.
What Your Invoice Should Not Include
- Personal details beyond your name and address (no national insurance number on client-facing documents)
- Vague catch-all descriptions that could be disputed
- Round numbers without breakdown on complex jobs — always itemise
Record Keeping Requirements
Keep copies of all invoices you issue for 6 years. This is HMRC's requirement for business records. Digital copies (PDF, accounting software exports) are acceptable — you do not need to keep paper copies if you have reliable digital backups.
FlashBill: Every Field Covered Automatically
FlashBill pre-fills all required fields and prompts you for the ones specific to your situation (VAT number if registered, UTR if CIS, CIS rate per client). Every invoice meets HMRC requirements automatically.