UK Invoice Template — VAT, CIS, Reverse Charge

A UK invoice has specific requirements: VAT registration number (if registered), company name and registration if a limited company, and the VAT treatment for each line. The generator covers every one of those; below are the UK-specific lines you actually need to get right.

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What every UK invoice must include by law

HMRC requirements for a valid invoice are stricter than informal billing. A UK invoice must include:

The word 'Invoice' clearly visible on the document.
A unique, sequential invoice number.
Your business name and address. If you're a limited company, the company's full registered name and Companies House registration number.
The customer's name and address.
The date of supply (the date the work was performed or goods delivered) and the date of issue if different.
A description of the goods or services supplied.
The amount being charged.
If VAT-registered: your VAT registration number, the rate of VAT charged on each line, the total VAT amount, and the total amount including VAT.

Sole traders are not required to register a company name; you can invoice as 'your name trading as [business name]' or simply your name. Limited companies must use the full registered name on every invoice (HMRC has fined companies for using just a trading name).

VAT: standard, flat-rate, and reverse-charge

UK VAT is more complex than the headline 20% standard rate suggests. Three main treatments:

Standard VAT. Most goods and services: 20%. Reduced rate (5%) for domestic energy, children's car seats, sanitary products. Zero rate (0%) for food, books, newspapers, children's clothes. If VAT-registered, you charge VAT at the appropriate rate per line and account for it on a quarterly VAT return.
Flat Rate Scheme. For businesses with turnover under £150k, you charge VAT at the normal rate but pay HMRC a single flat percentage of gross income (varies by trade: 14-16.5% is typical). Simpler but you can't reclaim input VAT (with limited exceptions for capital goods over £2,000). Worth modeling against standard VAT — Flat Rate can be more or less profitable depending on your input costs.
Domestic reverse charge. For construction services under CIS and for some other specified supplies, the customer accounts for the VAT rather than the supplier. The invoice shows the VAT amount as a memorandum but doesn't include it in the amount payable. Get this wrong and HMRC will assess penalties.

Below the £85k VAT threshold (FY 2025/26), you are not required to register for VAT. Many small operations stay under the threshold deliberately to keep paperwork simple. Voluntary registration is worthwhile if your clients are VAT-registered themselves (they reclaim the VAT you charge), but adds quarterly reporting overhead.

CIS — Construction Industry Scheme

Contractors and subcontractors in construction operate under HMRC's Construction Industry Scheme (CIS). The key implications for invoicing:

Verification required. Before paying a subcontractor, the contractor must verify the sub's CIS status with HMRC. The status determines deduction rate: 30% (unregistered), 20% (registered), or 0% (gross payment status).
Deduction shown on the invoice. The subcontractor's invoice shows labour (CIS-deductible) separately from materials (not CIS-deductible). The contractor then deducts the appropriate CIS rate from the labour portion and pays HMRC monthly.
VAT and CIS interact via the domestic reverse charge. Most B2B construction services are reverse-charged for VAT (introduced March 2021), which means VAT is not added to the invoice. The customer accounts for both VAT and CIS.

If you operate as a subcontractor in construction without registering with HMRC for CIS, the contractor must deduct 30% of every labour payment and remit to HMRC. Registering (free, online) lowers the deduction to 20%. Demonstrate consistent compliance and you can apply for gross-payment status (0% deduction).

Payment terms in the UK: typical and reality

Net 30 is the common UK B2B default, but the reality varies sharply by client type:

Public sector (NHS, local authorities, government). Net 30 by policy but Net 45-60 in practice. The Late Payment of Commercial Debts (Interest) Act gives you the right to charge statutory interest (currently base rate + 8%) on overdue invoices to public-sector clients.
Large corporates. Net 60-90 is increasingly common despite the Prompt Payment Code. Negotiate terms aggressively or include the Late Payment Act interest clause as a deterrent.
SMEs and direct individuals. Net 14-30 typically pays in 21-35 days. Less risk of dispute; less leverage if disputed.

Statutory interest under the Late Payment Act applies automatically to commercial debt, but in practice most freelancers don't enforce it for fear of damaging the relationship. The threat of enforcement (a written note 'I'd prefer to settle this directly; Late Payment Act interest is otherwise applicable') usually resolves the invoice.

Currency: GBP, EUR, USD

UK businesses dealing with EU or US clients commonly invoice in non-GBP currencies. Three things to know:

VAT must be shown in GBP on the invoice if you're VAT-registered, even if the rest of the invoice is in another currency. Use the HMRC spot rate on the date of supply.
FX risk is yours on long engagements quoted in a foreign currency. A 3-5% buffer in the rate covers normal FX movement; for major engagements, consider forward contracts via Wise or HSBC for hedging.
Wise (formerly TransferWise) Business accounts offer multi-currency receiving accounts (USD, EUR, GBP, AUD, etc.) at near-mid-market rates, much cheaper than traditional bank international transfers. Most UK freelancers with overseas clients should use one.

Common UK invoice mistakes

Limited companies invoicing under a trading name only. HMRC requires the full registered name. Use 'XYZ Ltd trading as ABC Brand' or just the registered name.
Missing the Companies House registration number. Required by Section 82 of the Companies Act 2006. Goes on every invoice from a limited company.
Treating reverse-charge VAT as zero-rated. The two are different. Reverse-charge means the customer accounts for the VAT; zero-rated means no VAT applies. Different lines on the VAT return.
Forgetting to charge VAT after crossing the £85k threshold. Once you've registered for VAT, you charge VAT from your effective registration date — even on invoices for work done before registration if the invoice is issued after.
Not citing the Late Payment Act on overdue invoices. Most clients pay when they realize the statutory interest applies; many don't pay until you cite it.

Frequently asked questions

Do I need a UTR or UK tax reference number on the invoice?

Not required by law for most invoices. UTR (Unique Taxpayer Reference) is between you and HMRC for self-assessment. Some clients ask for it for their records, but it's not a legal invoice requirement. VAT registration number is required if you're VAT-registered.

Can I issue invoices in EUR or USD from the UK?

Yes — but if you're VAT-registered, the VAT amount must be shown in GBP using the HMRC exchange rate on the date of supply. Many UK freelancers invoice in GBP for UK clients and in the client's currency for overseas clients.

What's the difference between sole trader invoicing and limited company invoicing?

Sole trader: simpler — just your name, address, and (if applicable) trading name. Limited company: must include the full registered name (not just trading name), Companies House registration number, and registered office address per Companies Act 2006 Section 82. Both need invoice number, date, description, and amounts.

How do I handle a customer who refuses to pay VAT?

VAT is a statutory charge — the customer doesn't have the option to refuse it if you're VAT-registered and the supply is standard-rated. If they push back, refer them to HMRC's VAT Notice 700. The exceptions are zero-rated supplies and reverse-charge transactions where the customer accounts for VAT themselves.