UK Invoice Requirements for Sole Traders & Limited Companies

Short version: every UK invoice — VAT-registered or not — needs a unique number, your business details, your customer's details, a clear description, and the amount owed. Once your turnover crosses £90,000 in any rolling 12-month period, you must register for VAT and add a VAT number and VAT breakdown to every invoice. A limited company has one further requirement most sole traders don't: showing its registered company details on business correspondence, invoices included.

What every UK invoice needs, VAT or not

• A unique, sequential invoice number — for your own records as much as your customer's.
• Your name or business name, address and contact details. A sole trader must show their own legal name somewhere on the invoice, even if they trade under a different business name.
• Your customer's name and address.
• A clear description of the goods or services supplied.
• The date of supply and the invoice date (often the same day, but not always — a supply date can precede the invoice by a few days).
• The amount(s) being charged, and the total due.

None of this depends on whether you're VAT-registered — it's the baseline HMRC and UK government guidance expects from any commercial invoice.

The VAT registration threshold — £90,000

You're legally required to register for VAT once your VAT-taxable turnover exceeds £90,000 over any rolling 12-month period — not just your accounting year — a threshold raised from £85,000 effective 1 April 2024. Two things catch people out here:

• It's a rolling window, not a fixed year. You need to check your trailing 12 months on an ongoing basis, not just once at year-end.
• You can register voluntarily below the threshold. Some small businesses do this anyway, most commonly to reclaim VAT on their own purchases — worth weighing against the extra admin of VAT returns.

Below the threshold and unregistered, the answer is simple: don't add a VAT line at all. Charging VAT without being registered isn't just a formatting choice — it's not legally permitted.

What a VAT invoice needs beyond the basics

Once you're VAT-registered, a full VAT invoice adds several fields to the standard list above:

For invoices under £250 including VAT, HMRC permits a simplified VAT invoice with a shorter field list — useful for retail-style transactions, though most freelancers and service businesses will find the full format simpler to use consistently across every invoice regardless of size.

Sole trader vs limited company: what actually differs

The company-registration requirement trips up a fair number of newly incorporated businesses — it's easy to carry over a sole-trader-style invoice after incorporating and forget to add the company number and registered office address that now apply.

Default payment terms under UK law

If a contract doesn't specify payment terms, the Late Payment of Commercial Debts (Interest) Act 1998 sets a default of 30 days from delivery of the goods/services or the invoice date, whichever is later. Past that deadline, you're entitled — without renegotiating anything — to claim:

• Statutory interest — currently 8% plus the Bank of England base rate, calculated on the overdue amount.
• A fixed compensation fee — a set amount depending on the size of the debt, intended to cover the cost of chasing late payment.

Agreeing a different term (e.g. 14 or 60 days) in your contract or terms of business overrides this default — the 30-day rule is only the fallback when nothing else was agreed.

Worked example

QWIK INVOICE's international invoice generator covers this directly — the Standard (USA / Global) format includes a Tax ID/VAT field and a single tax rate you can set to your UK VAT rate (or leave blank if you're not registered), with GBP as a currency option. Add your company details once in Settings, and every invoice after that carries them automatically — open the generator to try it.