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.
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:
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.
*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?