Free invoice generator for tradespeople

What a UK invoice needs to include

HMRC doesn't give you a set template, but gov.uk lists what every invoice must show. Whether you're a sole trader or a limited company, include:

• A unique invoice number. Number invoices in sequence and never reuse one.
• Your name or business name, an address, and your contact details
• Your customer's name (or business name) and address
• The invoice date, and the date the work was done if that is different
• A clear description of what you're charging for
• The amount for each item, any VAT, and the total owed

Sole traders must show their own name as well as any trading name. Limited companies must show their full company name exactly as it is registered at Companies House, and if an invoice names any director, it must name all of them.

VAT on invoices

If you're not VAT registered, you must not charge VAT, so leave the tax rate at 0%. You have to register once your VAT-taxable turnover over the last 12 months goes above the registration threshold, or you expect it to go above it in the next 30 days alone. The threshold is £90,000; check gov.uk for the current figure.

Once you are registered, your invoices become VAT invoices. On top of everything above, they need your VAT registration number, the time of supply, and the VAT rate and amount for each item. You usually have to issue a VAT invoice within 30 days of doing the work.

Construction work: CIS and the VAT reverse charge

If you work as a subcontractor under the Construction Industry Scheme (CIS), your contractor deducts tax from the labour part of your payment: 20% if you're registered for CIS, 30% if you're not. Materials you paid for yourself aren't subject to the deduction, and neither are VAT or equipment you hired for the job, so show labour and materials as separate lines.

If you're VAT registered and you invoice a VAT-registered contractor for CIS work, the domestic reverse charge usually applies. You don't add VAT to the total, and the invoice must say that the reverse charge applies, for example “Reverse charge: customer to pay the VAT to HMRC”. It doesn't apply to work for homeowners.

Setting payment terms

Put a due date or payment terms on every invoice, such as "Payment due within 14 days", and say how to pay: bank details or a payment link. Shorter terms usually mean you get paid sooner. 7, 14 and 30 days are all common.

When you invoice another business and you haven't agreed terms, the Late Payment of Commercial Debts (Interest) Act makes payment due after 30 days. After that you can claim interest at 8% above the Bank of England base rate, plus fixed compensation of £40, £70 or £100 depending on the size of the debt. These rights don't apply to invoices sent to consumers.

Fixing mistakes and keeping records

Don't edit or delete an invoice once you've sent it. If something is wrong, issue a credit note that cancels all or part of it, then send a corrected invoice with a new number.

Keep a copy of every invoice you send. Sole traders must keep records for at least 5 years after the 31 January Self Assessment deadline for that tax year. Limited companies usually have to keep them for 6 years.