Details you must include on limited company invoices

Sending out invoices for the goods or services you provide is a key task for limited company owners. If your invoices lack certain details, this could cause a delay in receiving payment, possibly resulting in cash-flow problems.

By law, you are required to include certain information on all your invoices. If you’re VAT registered – as many limited companies are – there are additional things to include (see below). So what exactly are the mandatory details you need to have on invoices you send out?

Essential information

  • Always clearly include the word ‘invoice’ on the document.
  • Include a unique invoice number (this must also be sequential if you’re registered for VAT).
  • Include your limited company’s registered number.
  • Include your VAT registration number (if applicable).
  • The tax point (if this is different from the invoice date).
  • Add your company address and full contact details, including telephone numbers, email address and social media.
  • Include the name of the client or the agency you are invoicing, as well as their full address and contact details.
  • Your invoice should specify what goods or services you are requesting payment for, for example: ‘consultancy services’ – 20 hours at £50 per hour.
  • Specify the date the invoice is issued and if the date of supply is different from the issue date, add the tax point.
  • State the total amount you have charged excluding VAT, the total including VAT and the rate of VAT (currently 20%).
  • Include any reference number or purchase order number you were given in advance by your client / agency / customer.
  • If you add the name of a director to your invoices, you must include the names of all the directors.
  • Add as a separate element from the goods or services’ provided details of the invoice, any expenses you are claiming, including VAT, that were agreed with the client.
  • Be clear about your preferred method of receiving payment, typically by electronic payment, and include the relevant information such as your company’s bank account and sort code.

These two GOV.UK guides are useful – a) what invoices must include, and b) additional details required if you’re VAT registered.

More details

We’d strongly recommend you discuss payment terms with your clients / customers before you undertake any work and/or send out invoices. The law in the UK assumes a 30-day payment period although longer periods are not unheard of, especially if you’re dealing with larger clients.

Be sure to specify what your payment terms are in advance and include these on your invoice. Many agencies and business clients will pay quite promptly. You can incentivise early payment by offering a discount if the invoice is settled within 7 days for instance.

Conversely, you are entitled to charge interest for late payment and while many smaller businesses are reluctant to do this, it is worth considering. In any case, you should always state what, if any, charges apply for late payment.

Are you VAT registered?

You must register for VAT if your company’s 12-month turnover exceeds the current VAT threshold (£85,000 for the 2020-21 tax year).

If you have only recently registered, you should note that you can’t add VAT to your invoices if you haven’t received your registration number yet.

As we mentioned above, VAT invoices have to be issued with a unique, sequential number. For instance, if you’re providing a service for ABC Company Ltd, your invoices should be formatted as ABC 001, ABC 002, and so on.

This will also help you to keep tabs on your own accounting. For more information on what a VAT invoice should include, see here for more details.

Project a professional image

It’s definitely worth taking some time to design an invoice that is clearly laid out, easy to read, and projects a professional image. You can do this yourself or commission a designer to do one for you which includes your company logo and any particular branding.

You can also find a range of accounting software products, such as the excellent FreeAgent, which will invoice clients directly – using a range of professional templates. This is a great way to keep on top of your invoicing while updating your accounts at the same time.

The human touch

Get the name and contact number of someone in the company or agency you’re invoicing. That way, if something does go wrong, there’s an issue with payment or you have a query, you know who to speak to get the matter resolved.

Tax-efficient protection for directors

  • limited company life cover