All you need for an HMRC compliant invoice

Maybe you’ve just started out and still figuring out what’s what, or maybe you’ve been going for a while and figure it’s time to stop invoicing on the back of a fag packet. Who knows?! There’s no judgement here either way.

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To start with the basics there are a few things other than your list of demands *ahem* amount of money owed, that you need to include. No matter what type of business you’re running you will need to include the following:

  • A unique ID number for that specific invoice (e.g. invoice #00001)
  • Your company details, including name, address, contact information
  • The details of the company you’re invoicing, including name and address
  • A clear description of what you’re charging for - usually a touch more specific than just ‘that work I did for you last Tuesday’
  • The date the work (goods or services) was provided - this is known as the ‘supply’ date and should be the day you completed the work
  • The date of the invoice
  • The amount(s) being charged
  • VAT amount if applicable
  • The total amount owed

Now clearly the above list is excluding a couple of key points. Namely payment terms and you actually want someone to pay the invoice. Neither are legally required by HMRC but let’s face it they’re probably one of the more crucial bits!

So you’ve got the fundamentals and for the majority of people who work for themselves that should be it. There are a couple of extras to be aware of depending on the type of business you have:


Sole trader needs to include:
Limited company needs to include:
Your name and any business name being used. For example, if you’re Joe Bloggs and you trade under Joe’s Coffee you need to include both.
The full company name as it appears on the certificate of incorporation. For example, you might trade with Java Jam but be incorporated as Java Jam and Associates Ltd, which would mean you have to include the full incorporated name.
An address where legal documents can be delivered to you if you’re using a business name
All the names of company directors if you’ve decided to include them. It isn’t mandatory but you can’t only put one director name down if you have five directors.

A quick note on VAT invoices, which are a slightly different beast. They are still invoices (obviously) but you only need to issue a VAT invoice if you and your customer are VAT registered. In addition to all the other information included on a non-VAT invoice you need to:

  • Issue and keep valid invoices (either paper or electronic)
  • Keep copies of all the sales invoices you issue, even if they are cancelled or you’ve made one by mistake
  • Keep all purchase invoices for items you buy

To add to the fun there are actually three types of VAT invoice: full version (can be used for all supplies and amounts of invoice), simplified (can be used for all supply and retail supplies under £250) and modified (can be used for retail supplies over £250). The table below shows a breakdown of what’s needed in each.

Category
Full VAT invoice
Simple VAT invoice
Modified VAT invoice
Unique invoice number (must be sequential and follow on from the last invoice)
Yes
Yes
Yes
Business name and address
Yes
Yes
Yes
VAT number
Yes
Yes
Yes
Date
Yes
No
Yes
Time of supply (if different from invoice date)
Yes
Yes
Yes
Customer name/trading name and address
Yes
No
Yes
Description of goods/services
Yes
Yes
Yes
Total amount excluding VAT
Yes
No
Yes
Total amount of VAT
Yes
No
Yes
Price per item excluding VAT
Yes
No
Yes
Quantity of each type of item
Yes
No
Yes
Rate of any discount per item
Yes
Yes
Yes
Rate of VAT charged per item (if any are exempt you put zero)
Yes
Yes*
Yes
Total amount including VAT
No
Yes*
Yes

*if items are charged at different rates, then show each item. 


Finally you need to make sure that VAT invoices are issued within 30 days of the ‘date of supply’ aka when you did the work or the date of payment if you’re paid in advance.

So that is the wonderful mysterious legal world of invoice requirements. Mostly, it’s pretty straightforward and definitely useful if you want to be paid. Let’s face it cash is king and you gotta have that cash flowing in!

Of course you could now go away and set up a template and make sure to input it all perfectly every time, and spend hours arguing with excel that the formula you’ve just put in does really work, or you could download Albert. Albert creates a beautiful invoice in seconds for you that’s ready to go off to your customer, send you a copy and even keeps track of them all. Oh and it can all be done on your phone, while the customer is right there. Gives you a bit more time to go out and get more customers to invoice doesn’t it?

BlogLucy WatsonBlog