Contractor Invoice Template UK

How to write a contractor invoice

• Quote the client's purchase order or contract number; many companies will not pay an invoice without it.
• Attach or reference the approved timesheet for the period you are billing.
• List expenses on their own lines and keep the receipts.
• Check whether your client must withhold tax from your payments in your country.

Not sure what to charge? Work out your minimum rate with the freelance rate calculator, and agree the price first with the quote generator.

What an invoice must include in the UK

• All invoices: a unique invoice number; your trading name, postal address and contact details; the customer's name and address; a clear description of what you are charging for; the date the goods or services were supplied; the date of the invoice; the amount(s) being charged; VAT amount if applicable; the total amount owed.
• Sole traders: your name and any business name, and an address where legal documents can be delivered if you use a business name.
• Limited companies: the full registered company name; if you name any director on the invoice you must name all of them.
• Full VAT invoice (HMRC VAT Notice 700/21): sequential invoice number; time of supply (tax point); date of issue if different; supplier name, address and VAT registration number; customer name and address; description sufficient to identify the goods or services; for each description, quantity or extent, rate of VAT and unit price; amount payable excluding VAT; rate of any cash discount; total VAT chargeable shown in sterling.

Invoice rules in the UK at a glance

Tax

VAT, standard rate 20%. See all rates and the VAT calculator

Tax number

VAT registration number

Not registered for tax

A business that is not VAT registered must not charge VAT or show VAT on its invoices and cannot issue VAT invoices. It still issues an ordinary invoice with the standard details.

Small invoices

A simplified VAT invoice can be issued where the supply is £250 or less including VAT; it shows your name, address and VAT number, the tax point, a description, and for each VAT rate the total including VAT and the rate. Above £250 a full or modified invoice is required.

Payment terms

30 days after the customer receives the invoice or the goods or services are delivered, whichever is later, if no date was agreed. Agreed terms between businesses should normally be no more than 60 days (30 days for public authorities).

Late payment

Late Payment of Commercial Debts (Interest) Act 1998: in business-to-business contracts the supplier can claim simple statutory interest plus a fixed sum for debt recovery costs, unless the contract sets a different (substantial) remedy. Fixed compensation: £40 for debts under £1,000; £70 for £1,000 to £9,999.99; £100 for £10,000 or more (once per invoice). Reasonable extra recovery costs can also be claimed.

Keep records

At least 6 years for VAT records (10 years for VAT One Stop Shop or Mini One Stop Shop records).

Contractor Invoice Template UK: frequently asked questions

Sources

1. GOV.UK: Invoicing and taking payment from customers - what invoices must include
2. HMRC: Record keeping (VAT Notice 700/21)
3. GOV.UK: Keeping VAT records
4. GOV.UK: Late commercial payments - charging interest
5. GOV.UK: Late commercial payments - claim debt recovery costs
6. Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002, article 4
7. Bank of England: Interest rates and Bank Rate