What is Invoice?
An invoice is a formal document sent by a seller to a buyer requesting payment for goods or services provided. It lists the items supplied, amounts owed, payment terms, and due date.
An invoice is the primary document freelancers and businesses use to request payment from clients. In the UK, while there is no single law mandating a specific invoice format, HMRC requires certain information on VAT invoices and recommends best practices for all invoices.
A valid UK invoice should include:
- Your name or business name and contact details
- The client's name and address
- A unique invoice number
- The invoice date and payment terms
- A description of each line item with quantities and prices
- The total amount due (including VAT if applicable)
- Your payment details (bank account or payment link)
If you are VAT-registered, your invoice must also show your VAT registration number, the VAT rate applied, and the VAT amount. See our guide on writing an invoice for a complete walkthrough.
Freelancers who are not VAT-registered should not charge or show VAT on their invoices. Instead, simply state the gross amount owed. Keeping a consistent invoicing process helps maintain healthy cash flow and reduces the chance of late payments.
Under UK law, you must keep copies of all invoices for at least six years (five years for self-assessment records after the 31 January deadline). Using invoicing software like OwnedWork makes it easy to generate, send, and store invoices in one place.
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Frequently Asked Questions
Is an invoice a legal document in the UK?
An invoice is not a legal document in itself, but it serves as evidence of a transaction. Combined with a contract or agreement, it can be used to pursue payment through the courts if necessary.
What is the difference between an invoice and a receipt?
An invoice is a request for payment sent before or at the time of delivery. A receipt is confirmation that payment has been received. Freelancers send invoices to get paid and issue receipts to confirm payment.
Do I need to charge VAT on my invoices?
Only if you are VAT-registered. In the UK, you must register for VAT if your taxable turnover exceeds £90,000 in a 12-month period. Below that threshold, registration is voluntary.
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