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An invoice is a request for payment, so it has to show clearly who is asking, who is paying, what for, and by when. HMRC and the law set a minimum. Every invoice needs:
If you trade as a limited company, the invoice must show the company's full registered name. It's good practice to add the registration number and registered office address too.
A full VAT invoice also needs your VAT registration number, the VAT rate and amount for each line, the total before VAT and the total VAT. If the date you supplied the goods or services (the tax point) is different from the invoice date, show both; add it in the notes box here. For sales of £250 or less including VAT, you can use a simplified VAT invoice. A pro forma invoice isn't a VAT invoice, so your customer can't reclaim VAT on it.
Put the due date on the invoice rather than just "30 days", and include bank details so there's no reason to wait. If a business customer pays late, you're entitled to statutory interest at 8% above the Bank of England base rate, plus fixed compensation:
| Amount owed | Fixed compensation |
|---|---|
| Up to £999.99 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 or more | £100 |
The payment terms calculator works out due dates and late payment interest for you.
A unique invoice number, your business name and address, the customer's name and address, a description of what you supplied, the date of supply, the invoice date, the amount owed, and when payment is due. Limited companies must also show their full registered name.
No. Only VAT-registered businesses can charge VAT, and a VAT invoice must show your VAT registration number. If you are not registered, leave the VAT option switched off.
Any terms you agree with the customer. If you have not agreed any, business-to-business payment is due 30 days after the customer receives the invoice or the goods or services, whichever is later.
Yes, for business customers. Under the Late Payment of Commercial Debts (Interest) Act 1998 you can claim interest at 8% above the Bank of England base rate, plus fixed compensation of £40, £70 or £100 depending on the size of the debt.
Sole traders must keep records for at least 5 years after the 31 January Self Assessment deadline for that tax year. Limited companies must usually keep them for 6 years from the end of the financial year.
Sources: GOV.UK: Invoicing and taking payment from customers, VAT guide (Notice 700) and late commercial payments.