How to write an invoice in the UK

A clear invoice gets paid faster and keeps HMRC happy. Here is exactly what to put on one, how VAT, CIS and the reverse charge change it, and what you can do when a business customer pays late.

What are the UK invoice rules in brief?

We checked these rules on GOV.UK and in HMRC's manuals on 12 October 2026. They apply across England, Scotland, Wales and Northern Ireland.

Who do these rules apply to?

Anyone who sells to another business or a homeowner and asks for payment: sole traders, partnerships and limited companies. You do not need to be VAT registered to issue an invoice. You must register for VAT once your taxable turnover goes over £90,000 in the last 12 months, and from then on the VAT invoice rules apply to sales to VAT-registered customers.

The CIS and reverse charge rules only apply to construction work paid under the Construction Industry Scheme. The late payment interest rules only apply when your customer is a business, not a homeowner.

How do you write an invoice, step by step?

1. Use a template or app. Our free UK invoice template has standard, VAT, CIS and reverse charge versions.
2. Add your business details. Name, trading name if used, address, phone and email. Add your VAT number if registered.
3. Give it a unique number. Keep one running sequence and never reuse a number.
4. Add the customer's name and address, plus the job address if different.
5. Write the invoice date and supply date. The supply date is when the work was done, or the period it covers.
6. Describe the work. Say what you did and where. Reference the quote number if there was one.
7. List labour and materials separately, with quantities and unit prices.
8. Add VAT if registered, or reverse charge wording if it applies.
9. Show any CIS deduction and the net amount due, if you are a subcontractor.
10. State the payment due date and how to pay. Bank details, with the invoice number as the payment reference.
11. Send it as a PDF the day you finish, and keep a copy for your records.

Payment terms wording you can copy

• Homeowner: "Payment due within 7 days, by 19 October 2026. Please pay by bank transfer using invoice number 1043 as the reference."
• Business: "Payment due within 30 days, by 11 November 2026. We may claim statutory interest and compensation on late payment under the Late Payment of Commercial Debts (Interest) Act 1998."
• Stage payment: "Stage 2 of 4 as per quote Q-1045. Balance after this payment: £3,200.00."

Fixing a mistake: credit notes

If an invoice is wrong, do not delete it or reuse its number. Issue a credit note that cancels all or part of it, then a new invoice with the next number. That keeps your sequence complete, which matters most if you are VAT registered.

What deadlines and late payment rights apply?

Deadlines

• VAT invoices: within 30 days of the time of supply.
• Your payment terms: up to you. For business customers, GOV.UK says agreed terms are usually up to 60 days (30 days for public authorities). If no date was agreed, payment becomes late 30 days after the customer receives the invoice or the work is done, whichever is later.
• CIS statements: the contractor must give you a payment and deduction statement within 14 days of the end of each tax month (tax months end on the 5th).

Late payment interest and compensation

If a business pays late, you can claim statutory interest at 8% a year plus the Bank of England base rate, unless your contract sets a different rate. The law fixes the base rate for each six-month period using the rate on 30 June or 31 December just before it. Bank Rate is 3.75% (set on 18 December 2025; we check it automatically against the Bank of England every day, last checked 13 October 2026), so at that rate a late debt attracts 11.75% a year.

You can claim the fixed sum once per invoice, as well as the interest. Our late payment interest calculator works out the daily interest and the total claim for you.

A simple chasing timeline

1. Due date: a friendly reminder the day after it passes.
2. 7 days late: a second reminder with a copy of the invoice.
3. 14 days late: a phone call, then a written note that statutory interest and compensation will be added (business customers only).
4. 30 days late: a formal letter before action giving a final date, before you consider a small claim through the courts.

These steps are our suggestion, not legal requirements. If you add interest, GOV.UK says to send a new invoice showing it.

Worked example: a CIS invoice and a late payment claim

A self-employed electrician is a registered CIS subcontractor and VAT registered. They invoice a VAT-registered main contractor for first fix on a housing job. These are example figures.

The contractor pays the £400 CIS deduction to HMRC, and the electrician offsets it against their own tax. The contractor also accounts for the £480 VAT through its VAT return. Our guide to the domestic reverse charge for construction explains when this applies and when it does not.

Now suppose the contractor pays the £2,400 invoice 45 days late. Interest at 11.75% is £282.00 a year, or about 77p a day. Over 45 days that is £34.77. Because the debt is between £1,000 and £9,999.99, the electrician can add £70 fixed compensation. The total claim is £2,400.00 plus £34.77 plus £70.00, which is £2,504.77.

What are the most common invoice mistakes?

• No due date. "Payment on receipt" is vague. Write a real date.
• Adding VAT before you are registered. You cannot charge VAT without a VAT number.
• Including VAT in the total on a reverse charge invoice. Show it, but leave it out of the total.
• Applying CIS to materials. The deduction is on labour, after taking off VAT and materials you paid for.
• Deleting a wrong invoice. Issue a credit note instead, so your numbering stays complete.
• Threatening late payment interest on a homeowner. The statutory scheme is for business debts only.
• Invoicing weeks after the job. The later you send it, the later you are paid.

What software helps you write invoices?

Templates are fine at low volumes. Once you are sending several invoices a week, job management software saves time by turning quotes and job sheets into invoices, adding card payment links and sending reminders. Compare the options in our guide to the best quote and invoice software for UK trades.

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Subcontracting? Read our CIS guide for subcontractors before your first CIS invoice.