How to Invoice as a Sole Trader in the UK: Complete Guide

How to Invoice as a Sole Trader in the UK

If you're self-employed in the UK, sending proper invoices isn't just good practice — it's essential for tax compliance and getting paid on time. Whether you're a plumber, graphic designer, personal trainer, or consultant, this guide covers everything you need to know about invoicing as a sole trader.

Do Sole Traders Need to Send Invoices?

Yes. While there's no legal requirement to send invoices to every customer (especially for cash sales to individuals), you must keep records of all income for your Self Assessment tax return. Invoices are the best way to do this.

If you're VAT-registered, you are legally required to issue VAT invoices for taxable supplies to other VAT-registered businesses.

What to Include on a Sole Trader Invoice

HMRC doesn't prescribe an exact invoice format, but your invoices should include:

1. Your name and business name (if different)
2. Your address and contact details
3. A unique invoice number — Sequential numbers (001, 002, 003) work fine
4. The date of the invoice
5. Your client's name and address
6. A clear description of goods or services provided
7. Dates the work was carried out
8. The amount charged (broken down by item if multiple services)
9. The total amount due
10. Payment terms — When and how you expect to be paid

VAT Invoices: Additional Requirements

If you're VAT-registered (turnover above £90,000 as of 2025/26), your invoices must also include:

• Your VAT registration number
• The VAT rate applied to each item
• The total VAT amount
• The total amount including VAT
• The date of supply (if different from the invoice date)

For invoices under £250, you can issue a simplified VAT invoice that doesn't need the customer's details.

Invoice Numbering for Sole Traders

HMRC requires that invoice numbers are:

• Unique — No two invoices should share the same number
• Sequential — Numbers should follow a logical order

Good formats include:

• Simple numbers: 001, 002, 003
• Year-prefixed: 2026-001, 2026-002
• Client-coded: ABC-001, ABC-002

Setting Payment Terms

Common payment terms for UK sole traders:

• Due on receipt — Payment expected immediately (good for one-off jobs)
• 7 days — Common for trades and services
• 14 days — A reasonable middle ground
• 30 days — Standard for B2B work

Under the Late Payment of Commercial Debts Act, you can charge interest on late B2B payments (8% + Bank of England base rate) and claim compensation (£40–£100 depending on the debt size).

How to Handle Expenses and Reimbursements

If you've incurred expenses on behalf of a client (materials, travel, etc.), you can include them on your invoice. List them separately from your service fees and attach receipts if your client requires them.

Record Keeping for HMRC

As a sole trader, you must keep records of all invoices for at least 5 years after the 31 January submission deadline. This means if you file your 2025/26 return by 31 January 2027, keep records until 31 January 2032.

Keep records of:

• All invoices issued
• All payments received
• Bank statements matching payments to invoices
• Any credit notes issued

CIS (Construction Industry Scheme) Invoices

If you work in construction, your invoices may need to account for CIS deductions. The contractor typically deducts 20% (or 30% if you're not registered for CIS) from your payment and passes it to HMRC.

Your invoice should show:

• The gross amount
• Any materials costs (not subject to CIS deduction)
• The labour amount subject to deduction
• The CIS deduction amount
• The net payment you expect to receive

Common Sole Trader Invoicing Mistakes

• Not invoicing promptly — Send invoices as soon as the work is done
• Missing your UTR number — Some clients require your Unique Taxpayer Reference
• Charging VAT when not registered — You cannot charge VAT unless you're VAT-registered
• Poor record keeping — HMRC can investigate up to 6 years back (20 years for fraud)
• Not chasing late payments — Don't be afraid to follow up

Free Invoice Templates for UK Sole Traders

You don't need expensive accounting software to create compliant invoices. A good free invoice generator will handle all the formatting and calculations for you.

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Create HMRC-compliant invoices in seconds with 1nvoic3 — free templates designed for UK sole traders. No sign-up needed.