An invoice is not just a request for money. It is a record HMRC may ask to see, a document your customer may need for their own accounts, and the thing that decides whether you are paid this week or next month. Getting the basics right takes ten minutes to set up and saves hours later.
What a sole trader invoice must include
HMRC's guidance for invoices that are not VAT invoices says they should show:
- a unique invoice number
- your name, or your business name, and an address
- the customer's name or business name, and address
- a clear description of what you are charging for
- the date the goods or services were supplied (the supply date)
- the date of the invoice
- the amount being charged
- the total amount owed
If you trade under a name that is not your own, for example "Bright Spark Electrical" rather than "Sam Jones", the business names rules mean you should also show your own name and an address where documents can be served. Check the current wording on GOV.UK if you are unsure, as it is easy to miss.
If you are VAT registered
You must register for VAT if your taxable turnover goes over the VAT registration threshold in any rolling 12-month period, or you expect it to in the next 30 days. The threshold has been £90,000 since April 2024, but check GOV.UK for the current figure. Once registered, a full VAT invoice also needs:
- your VAT registration number
- the VAT rate charged on each line and the amount of VAT
- the total excluding VAT and the total VAT
- the time of supply (tax point) if it is different from the invoice date
There are simplified rules for retail sales under £250 and special wording for some situations, such as the construction domestic reverse charge. If you are not VAT registered, do not show VAT on your invoices, and do not imply you are registered.
Payment terms: say exactly when and how
"Payment due on receipt" is common but vague. "Payment due within 7 days, by 14 March 2026" is better, because it gives a real date. For business customers, if no terms are agreed, the law treats payment as due 30 days after the invoice or the delivery of the service, whichever is later. You can agree shorter terms, and for domestic customers it is normal to ask for payment on completion.
Make paying easy. List every way to pay, and put the most convenient first:
- a pay-by-card link or QR code on the invoice
- bank transfer, with your sort code, account number and the invoice number as the reference
- Direct Debit for regular customers (see our Direct Debit guide)
The fewer steps between reading the invoice and paying it, the faster you get paid.
A simple invoice layout that works
| Section | What goes in it |
|---|---|
| Header | Your logo, business name, address, phone, email, VAT number if registered |
| Invoice details | Invoice number, invoice date, supply date, due date |
| Bill to | Customer name and billing address, plus the job address if different |
| Lines | Description, quantity, unit price, VAT rate if registered, line total |
| Totals | Subtotal, VAT, deposit already paid, amount due |
| Payment | How to pay, with a link or bank details and the reference to use |
| Notes | Thank you, warranty details and any terms |
You can try this layout with our free invoice generator, which fills in the totals and saves a PDF.
Deposits, stage payments and part payments
If a customer paid a deposit when they accepted your quote, show it on the final invoice as "deposit received" and reduce the amount due. On longer jobs, invoice each stage when you reach it and refer to the original quote, so the customer can see how much is left. When a customer pays part of an invoice, record the payment and send an updated balance rather than issuing a new invoice for the remainder.
Credit notes and refunds
If you need to cancel or reduce an invoice after sending it, issue a credit note that refers to the original invoice number, rather than editing or deleting the original. This keeps your numbering sequence intact and your records honest, which matters if HMRC ever looks.
Keep records the way HMRC expects
As a sole trader you need to keep records of your sales and expenses, normally for at least five years after the 31 January submission deadline of the relevant tax year. Making Tax Digital for Income Tax now applies to some sole traders, which means keeping digital records and sending quarterly updates. Our guide to Making Tax Digital for tradespeople explains who is affected and when.
Mistakes that delay payment
- Sending the invoice days after the job. The longer you wait, the less urgent it feels. Send it the same day.
- Vague descriptions. "Works as discussed" invites questions. List the actual work.
- No due date. Customers pay invoices with dates first.
- Wrong customer name. Landlords, companies and agents often need the invoice in a specific name to pay it.
- No easy way to pay. If paying means finding a laptop and typing in bank details, many people will put it off.
What to do when an invoice is late
Send a polite reminder the day after the due date, another a week later and a firmer one a week after that. For business customers you may be entitled to statutory interest and fixed compensation, explained in our guide to late payment interest. For domestic customers, a phone call is often quicker than another email.
Rules change, so check GOV.UK or speak to an accountant if you are unsure about anything specific to your business.
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