What does a great invoice look like?

FreeAgent’s Chief Accountant Emily Coltman gives you the ingredients for a successful invoice and lists HMRC’s requirements if your business is VAT registered.

Invoice
  1. Logo

    Make sure the invoice design matches your company’s brand, whether it’s quirky and fun or simple and clean.
  2. Quantity and description

    Your quantity and description should be crystal-clear about what and how much you’ve delivered.
  3. Additional notes

    Use this space to add a friendly note, answer any potential questions that the client may have, and to give any other payment instructions.
  4. Companies House number

    If you’re a limited company or LLP, you need to show your Companies House Registered number and address. And if you include the name of one director or member on your invoice, you must include the names of all directors or members!
  5. Trading address

    Include your trading address, and don’t forget the phone number in case the client has any questions.
  6. Invoice number

    Use a unique, sequential invoice number. You could count up from each new invoice (001, 002, 003), or sequence by client or project (ClientA-001, ProjectX-001).
  7. Due date

    Tell your client when you expect them to pay – remember to discuss your payment terms before starting work!
  8. Bank details

    Make it super-simple for your client to pay you by including your bank details. In FreeAgent, you can also add a link so your client can pay online!

HMRC's VAT Requirements

Are you VAT-registered? Here's what HMRC requires you to include on every invoice:

  • Your name (or trading name) and address
  • Your VAT registration number
  • An invoice number which is unique and follows on from the number of the previous invoice (if you spoil or cancel a serially numbered invoice, you must keep it to show to a VAT officer at your next VAT inspection)
  • The invoice date
  • The time of supply, also known as the tax point. You only need to include this if the tax point date is different from the invoice date.
  • The customer's name (or trading name) and address
  • A description sufficient to identify the goods or services supplied to the customer
  • The rate of any cash discount per item
  • The total amount of VAT charged, expressed in sterling

And for each different type of item listed on the invoice, you must show:

  • The unit price or rate, excluding VAT
  • The quantity of goods or the extent of the services
  • The rate of VAT that applies to what's being sold
  • The total amount payable, excluding VAT

And if you issue a VAT invoice that includes zero-rated or exempt goods or services, you must:

  • Show clearly that there is no VAT payable on those good or services
  • Show the total of those values separately

If you make retail sales and you make a sale of goods or services for £250 or less (including VAT), you can issue a simplified VAT invoice. For more information, take a look at HMRC’s guide. Disclaimer: Emily is a great accountant, but this guide is not a substitute for advice from your own accountant, tailored to your own business. This information does not constitute accounting advice.

Do you want simple invoice software that helps you get paid faster?

Fully HMRC compliant templates

Our HMRC-compliant invoices fill in all the information the tax man requires. Choose a template from our gallery, or customise your own in CSS.

Faster online payments

Want to get paid online? No problem. Your clients can view invoices online and pay by credit/debit card, Direct Debit, PayPal, GoCardless or Stripe.

Invoices that chase themselves

Set up recurring invoices that can send themselves automatically, and nudge those pesky late-paying clients with automated reminders.

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