HMRC Invoice Requirements: Complete Guide

As soon as you need to bill on behalf of your business or sole proprietorship you’ll need to understand UK invoice requirements. The HMRC invoice requirements can vary depending on whether you’re VAT registered, and where your customer is located. This guide walks through what you need to know.

We’ll take a look at what an invoice must include in the UK, and what to consider when billing overseas, as well as HMRC VAT invoice requirements and time limits. To make it easier to get paid by customers at home and abroad we’ll also touch on Wise Business which offers an easy to use international account with low fees and the mid-market exchange rate.

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HMRC invoice requirements - An overview

Issuing invoices is a practical and usually legal requirement, as soon as you start doing business in the UK. Preparing a professional invoice confirms to your customer what must be paid and when, and limits the chance of misunderstandings later. Plus, if you’re VAT registered, an invoice will be mandatory to make sure that the government can check and account for all VAT collected through your sales.

This guide walks through the invoice legal requirements in the UK^¹. You can also learn more about invoicing for sole traders or for issuing invoices in the UK for customers abroad, in our complete guides.

HMRC VAT invoice requirements

If you and the customer are VAT registered in the UK it’s mandatory to issue a VAT invoice, which needs to include all the standard UK invoicing details, plus VAT split out^². A VAT invoice in the UK must show the VAT as a separate amount, and also your VAT number. This allows the government to make sure all VAT is being properly collected on sales.

VAT isn’t always applied - so if you’re unsure about how the rules apply to your specific business you’ll need to get some professional advice. For example, if you’re exporting you may not need to charge VAT, and if you’re involved in heath, education and charity work you may also be VAT exempt.

What an invoice must include?

Exactly what’s needed on an invoice will depend on the situation, and where your customer is based.

Standard invoices within the UK must include the following:

• A unique identification number
• The name, address and contact information of the seller and buyer
• Quantity, type and price of goods or services supplied
• The date the goods or service were provided
• The date of the invoice
• VAT amount if applicable
• The total amount owed and the currency

If you’re a sole trader you also need to include your personal address and contact information while registered companies need to add their registered business address.

VAT invoices may need extra information to cover the VAT being collected. Finally, if you’re billing outside of the UK you might need to include extra detail to fit local invoicing requirements - for example, you might be asked to add in the billing amount in the local currency wherever your customer is based.

If you are invoicing overseas, a Wise Business multi-currency account can be a helpful tool to receive payments on your customer's local currency, like Euros or American Dollars.

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UK invoice requirements - FAQs

Let’s take a look at a few more key questions about invoicing in the UK.

What is the time limit for issuing invoices in the UK?

If you’re issuing a VAT invoice it must be provided within 30 days so all VAT can be accounted for properly^³.

What is the difference between a receipt and an invoice?

An invoice is issued in advance of a customer paying you - it shows the amount owed, the payment due date and other key information to allow them to actually pass over the money owed. A receipt can be provided after the payment has been received, to confirm that the money was received as agreed.

How do you deal with late invoices?

Unless you’ve included a specific payment deadline, the customer must pay you within 30 days. After this you can choose to charge interest if you want to, although this isn’t mandatory.

If you’re not paid on time you might choose to seek mediation which might be available for free, take court action or issue a statutory demand for your money^⁴. You’ll need to get advice to help decide which option is best given the unique circumstances.

Learn more about common payment terms in the UK

Is it legal to amend an invoice in the UK?

If your invoice has an error in it, you may need to change the details. There are a couple of ways you can do this - simply update the invoice and resend, or cancel it, issue a credit note and create an entirely new invoice with a new unique identifier. Both are usually OK. However, which is best will depend on the situation, and also your customer’s preferences, so it’s worth having an upfront conversation if you discover an error after an invoice has been issued.

Get paid on time in multiple currencies - Meet Wise Business

Wise Business can help UK businesses, freelancers and sole traders get paid by customers in multiple currencies, with low fees and the mid-market exchange rate.

Your Wise Business account comes with local account details to get paid in major foreign currencies like Euros and US Dollars just as easily as you do in Pounds. All you need to do is pass these account details to your customer, or add them to invoices, and your customer can make a local payment in their preferred currency. You can also use the Wise request payment feature to make it even easier and quicker for customers to pay you.

Get started with Wise Business 🚀

Managing business invoicing can be a headache - but Wise Business lets you get paid easily in currencies from around the world. Once you have a payment in your account you can convert to pounds or one of the other 40+ supported currencies, or hold onto your balance to cover supplier and contractor invoices at a later date. That reduces the need to convert currencies unnecessarily and saves money in the end.

Use this guide to get familiar with the UK’s invoicing requirements - and see how Wise Business can help you connect with customers around the world.

Sources used in this article:

1. UK government - invoice requirements
2. HMRC - VAT
3. UK government - VAT manual
4. UK government - what to do if you’re owed money

Sources last checked March 27, 2024