How to Invoice in the UK

What is an invoice, legally?

In the UK, an invoice is a commercial document that requests payment for goods or services you have already supplied. It creates a legal record of the transaction for both parties and forms the basis for your bookkeeping, tax returns, and VAT claims. HMRC treats invoices as primary accounting records — which means they must be kept for at least six years.

Invoices are not the same as quotes (which describe work you will do) or receipts (which confirm payment received). An invoice is the formal request for money owed.

What must be on a UK invoice

HMRC sets out mandatory information for invoices. If you are not VAT-registered, your invoice must include:

• A unique, sequential invoice number (e.g. INV-2026-001)
• Your full name or trading name, and your business address
• The client's name and address
• The date the invoice was issued
• A clear description of the goods or services supplied
• The amount charged for each item
• The total amount owed

If you are VAT-registered, you must also include:

• Your VAT registration number
• The VAT rate applied to each item
• The total VAT amount charged
• The total excluding VAT, and the total including VAT
• For different rates on the same invoice, a breakdown by rate

There is no legal requirement to include your UTR (Unique Taxpayer Reference) on an invoice — that is for your Self Assessment tax return, not your clients. You also do not need to include your National Insurance number.

Invoice numbering: how to do it right

Every invoice must have a unique number. HMRC requires a sequential series with no gaps — skipped numbers can trigger questions during a tax investigation. Common formats:

• INV-001, INV-002 — simple counter, works for low volumes
• INV-2026-001 — year prefix, resets annually
• INV-20260001 — date-based, easier to cross-reference

Pick a format and stick to it. If you use a tool like 3docs, the numbering is tracked for you automatically and never reused.

Setting payment terms

UK law defaults to 30-day payment terms for business-to-business transactions under the Late Payment of Commercial Debts (Interest) Act 1998. You can set your own shorter or longer terms — just state them clearly on every invoice.

Common payment terms

• Due on receipt — payment expected immediately (common for small jobs)
• Net 14 — due within 14 days of the invoice date
• Net 30 — the standard UK business default
• 50% upfront, 50% on completion — typical for large projects

Always include your bank details on the invoice: account holder name, sort code, and account number. The easier you make it to pay, the faster you get paid.

Adding VAT to an invoice

You must only charge VAT if you are registered with HMRC. Charging VAT without a registration number is illegal. If you are registered, the standard rate is 20% for most goods and services.

A VAT-inclusive invoice line looks like this: a £500 service plus 20% VAT = £100 VAT, total £600. Show both the net amount and the VAT separately — do not just write £600 without a breakdown.

Not sure whether you need to register for VAT? Read our full VAT guide.

How to send an invoice

There is no legal requirement to send invoices by post — email is widely accepted and legally valid in the UK. PDF is the standard format because it preserves layout across devices and is harder to accidentally edit.

Best practice when emailing:

• Put the invoice number and amount in the email subject line (e.g. “Invoice INV-2026-014 · £1,200 due 14 June”)
• Attach the PDF — do not embed it in the email body
• Include your bank details in the email as well as the invoice
• Keep a sent copy in your records

What to do when an invoice is not paid

Late payment is the number-one cash flow problem for UK freelancers. Here is a step-by-step approach:

1. Send a polite reminder

Email the day after the due date. Keep the tone professional — clients sometimes miss invoices. Include the invoice as a PDF attachment and restate your bank details.

2. Charge statutory interest

Under the Late Payment of Commercial Debts (Interest) Act 1998, you have the automatic right to charge interest on overdue B2B invoices at 8% above the Bank of England base rate. As of 2026, with the base rate at 4.25%, that is 12.25% per annum. You also have the right to add a fixed debt recovery charge (£40 for debts under £1,000; £70 for £1,000–£9,999; £100 for £10,000+).

Add a line to your follow-up email noting that interest is accruing. Most clients pay quickly once they know the meter is running.

3. Formal demand letter

If reminders are ignored, send a formal letter before action by recorded post, setting a 7-day deadline. Templates are freely available from the government website.

4. Small Claims Court

For debts up to £10,000, you can use the county court money claims service (moneyclaim.gov.uk). Filing fees range from £35 to £455 depending on the claim value. The court can issue a county court judgment (CCJ) against the debtor — which affects their credit rating and can be enforced by bailiffs if unpaid.

Record-keeping obligations

HMRC requires you to keep your business records for a minimum of five years after the 31 January self-assessment deadline for the relevant tax year — effectively six years from the end of the accounting period. This includes:

• Copies of every invoice you send
• Purchase invoices and receipts for expenses you claim
• Bank statements
• Mileage logs (if you claim vehicle expenses)

Digital records are fully acceptable — you do not need paper copies. 3docs stores all your invoices automatically, with a CSV export available for your accountant.