Business Invoices UK: What to Include & How to Issue

At a glance

• Company name on every invoice: if you trade as a limited company, your registered company name must appear on every invoice — Companies Act 2006, s.82, given effect by SI 2015/17, regulation 24.
• Registered number and office: the same regulations require your registered number, the part of the UK you're registered in, and your registered office address on business letters, order forms and your website (regulation 25); many businesses add these to invoices too, as good practice.
• Full VAT invoice content: if you're VAT-registered, a tax invoice needs the specific detail set out in regulation 14 of the VAT Regulations 1995 — see below.
• Current VAT registration threshold: £90,000 taxable turnover in any 12-month period, effective from 1 April 2024 — always check GOV.UK for the current figure.
• Statutory late payment interest: 8% above the Bank of England base rate on commercial debts between businesses, under the Late Payment of Commercial Debts (Interest) Act 1998 as amended by SI 2013/395.
• Fixed compensation for late payment: £40 (debts under £1,000), £70 (£1,000–£9,999.99) or £100 (£10,000+), on top of statutory interest.
• Record-keeping: keep invoices and related records for a minimum of six years as a general rule — check GOV.UK for the period that applies to your specific tax records.

What counts as a valid business invoice

A business invoice is a commercial document issued by a seller to a buyer setting out the goods or services supplied, the amount owed, and when payment is due. In England and Wales it serves as evidence of a transaction and, depending on the circumstances, can form part of the contract between the parties. It also tells HMRC — if you're VAT-registered — exactly what tax has been charged and on what basis.

Several document types share the "invoice" label but serve different purposes:

| Document | Purpose | Payment demand? | |---|---|---| | Standard commercial invoice | Everyday record of a completed sale | Yes | | VAT invoice | As above, plus the tax detail HMRC requires from VAT-registered suppliers | Yes | | Pro forma invoice | A quote or advance notice issued before a sale is finalised | No | | Credit note | Reverses or reduces a previous invoice | No (reduces amount owed) |

Using the wrong type causes confusion with customers and complications in your accounts — a pro forma sent as if it were a demand for payment, for example, can leave a customer unclear about whether they actually owe you money yet.

What every invoice needs to show

Whatever your business structure, a compliant invoice should include:

1. A unique, sequential invoice number.
2. The date of issue.
3. Your business name, trading address and contact details.
4. The customer's name and address.
5. A clear description of the goods or services supplied, with quantity where relevant.
6. The amount due and the currency.
7. Payment terms — when payment is due and how to pay.

If you trade as a limited company, your registered company name must additionally appear, by law, on every invoice. This comes from Companies Act 2006, s.82, which gives the Secretary of State power to make regulations requiring disclosure of company details; the current rules sit in the Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2015 (SI 2015/17), regulation 24. The same regulations, at regulation 25, require your registered number, the part of the UK your company is registered in, and your registered office address on your business letters, order forms and website. Many businesses also print this detail on invoices — it isn't strictly required by regulation 25 for invoices specifically, but it helps larger customers verify you as a supplier and speeds up their own compliance checks before they pay.

If you're a sole trader, there is no registered company, so the company-specific disclosure rules don't apply. Show your trading name, your own name if it differs from the trading name, and a contact address instead.

VAT invoices: the extra detail HMRC requires

If you're VAT-registered, a full VAT invoice must carry additional information beyond a standard invoice. Under regulation 14 of the VAT Regulations 1995 (SI 1995/2518), a VAT invoice must state:

• an identifying (invoice) number;
• the time of supply (the "tax point");
• the date of issue;
• your name, address and VAT registration number;
• the customer's name and address;
• a description sufficient to identify the goods or services;
• for each description, the quantity or extent supplied, the rate of VAT, and the amount payable excluding VAT;
• the rate of any cash discount offered;
• each rate of VAT charged and the amount of VAT chargeable at that rate; and
• the total amount of VAT chargeable.

HMRC also permits a simplified VAT invoice for certain lower-value, typically retail-type supplies, which carries less detail than a full VAT invoice — check current thresholds and format requirements on GOV.UK before relying on the shorter form.

The VAT registration threshold

You must register for VAT once your taxable turnover exceeds the registration threshold in any rolling 12-month period. Following the Spring Budget 2024, that threshold rose to £90,000 from 1 April 2024 (up from £85,000), with the deregistration threshold rising to £88,000. Once you exceed the threshold you generally have 30 days to notify HMRC. These figures are periodically reviewed, so check GOV.UK for the current position before deciding whether you need to register.

Payment terms and the right to charge interest on late payment

State your payment terms clearly on every invoice: when payment is due, how the customer should pay, and what happens if they pay late. Common terms are 14, 30 or 60 days from the invoice date. If you sell to other businesses in England and Wales, the Late Payment of Commercial Debts (Interest) Act 1998, as amended by the Late Payment of Commercial Debts Regulations 2013 (SI 2013/395), gives you a statutory right to claim:

• interest at 8% above the Bank of England base rate on the overdue amount, running from the day after payment was due (or, if no date was agreed, 30 days after the later of delivery or invoicing) — check the Bank of England or GOV.UK for the current base rate before calculating a figure; and
• fixed compensation on top of that interest, set by reference to the size of the debt:

| Size of debt | Fixed compensation | |---|---| | Less than £1,000 | £40 | | £1,000 or more, but less than £10,000 | £70 | | £10,000 or more | £100 |

This right applies automatically to qualifying business-to-business contracts — you don't need to write it into your terms for it to exist, although stating it on your invoice or terms of business (see our guide on business-to-business terms of service) makes your position clear to the customer upfront. A contract can only override the statutory remedy if it provides a "substantial contractual remedy" that is broadly equivalent — a clause that simply removes the right to claim, with nothing put in its place, will not generally be effective.

Worked example: calculating what you're owed

Suppose you issue an invoice for £4,500, due 30 days from the invoice date, and the customer pays 45 days late. You are entitled to statutory interest at 8% above the base rate in force on the relevant reference date, calculated daily on £4,500 for those 45 days, plus a fixed £70 in compensation (because the debt falls in the £1,000–£9,999.99 band). If your own reasonable costs of recovering the debt — for example, a debt-collection agency's fee — exceed £70, the 2013 Regulations also allow you to claim the shortfall between the fixed sum and those actual costs. Always check the current base rate before working out an exact interest figure, since it changes over time.

Sending, storing and disputing invoices

Electronic invoices — sent as PDF attachments or through accounting software — are accepted in the UK, provided the customer agrees to receive them in that format; the content requirements are the same as for paper invoices. As a general rule, keep copies of every invoice you send and receive for at least six years for tax purposes; check GOV.UK for any longer period that applies to your specific records.

If a customer disputes an invoice, respond in writing and ask them to set out exactly what they disagree with. Check your own records, including any contract, order confirmation or correspondence — our guide on business services information requirements covers the related duty to make certain terms available to customers before you supply them. Many disputes resolve once a figure is clarified or a credit note issued for a specific item. If the disagreement can't be settled, mediation or a claim through the small claims track may be the next step.

What to do before you send your next invoice

1. Confirm your business structure's requirements. Limited company: registered name mandatory on the invoice, registered number and office recommended. Sole trader: trading name and contact address.
2. Check your VAT position. If you're VAT-registered, use the full regulation 14 content list above. If you're close to the £90,000 threshold, monitor your rolling 12-month turnover so you don't miss the 30-day registration window.
3. Set out payment terms clearly, including the number of days for payment and how you expect to be paid.
4. Decide whether to reference your statutory late-payment rights on the invoice — many businesses add a short line noting that interest and compensation apply to overdue payments under the 1998 Act.
5. Issue promptly and keep a copy — electronically is fine, provided your customer accepts that format.
6. If a payment is overdue, calculate what you're entitled to using the current base rate and the compensation band for the debt size, before sending a formal chase.

This guide provides general information about business invoicing requirements in England and Wales. It is not legal advice and is not a substitute for advice tailored to your specific circumstances. The law described was accurate as at August 2026 and is subject to change — always check GOV.UK and legislation.gov.uk for the most current position, particularly for the VAT threshold, the current base rate, and the fixed compensation figures.

Last reviewed: August 2026 · Next review due: August 2027 or on legislative change.