Invoice Requirements in the UK

What requirements must an invoice meet to be deemed proper in the UK?

If you want to know what requirements an invoice needs to be deemed proper in the UK, you have come to the right place. Below we will specify the requirements based on different types of business.

The UK Government has made the following specifications mandatory for all commercial invoices:

1. Unique identification number
2. Name and address of both seller and recipient, as well as the date of sale
3. A detailed description of the merchandise
4. Supply date of goods or services
5. Price of each item of merchandise
6. All additional charges on the merchandise (shipping, insurance, etc.)
7. VAT amount (if applicable)
8. Total amount owed

For transactions between two VAT registered companies, besides the above information, the following must also be included:

1. VAT number
2. Tax point (time of supply)
3. Price per item (excluding VAT)
4. Total amount excluding VAT
5. Total VAT amount
6. Item quantity and discount rate (if applicable)
7. VAT rate charged per item
8. The total amount including VAT

If the company is a Sole trader than the invoice must also include:

1. Owner’s Name and the business name is used
2. Address where any legal documents can be delivered to you if you are using a business name

If the company is a Limited company than the invoice must also include:

1. Full company name as it appears on the certificate of incorporation
2. If anyone director’s name is included, then all the names of the directors must be included as well, otherwise, none of the Directors’ names need to be included.

Characteristics of a valid invoice in the UK?

Valid invoices are those which are legible, from which a clear scanned image can be produced, and which clearly show the following information:

(a) the department being billed

(b) where related to a purchase order (PO), the 10 digit PO number or were not related to a PO, the contact name in the department (the person requesting the goods)

(c) the invoice number, or where a utility bill, the account number

(d) payment terms

(e) invoice date/tax point

(f) supplier name, address, postcode and VAT registration number

(g) remittance name and address where this is different to (f) above

(h) goods/service details which match the PO details, including quantity billed, item description, unit of measure, unit price, and the total value

(i) the agreed charge, including any discounts, handling and freight charges and a breakdown clearly showing each VAT amount and the applicable VAT rate (and were not complete, a breakdown of the relevant work or services).

Further points to remember

Doing the following can create difficulties with an invoice, thus better to remember the following:

1. Don’t print on dark paper
2. Don’t print in ink colors that are difficult to scan

Additionally, it is best to have invoices typewritten. If the invoice is handwritten make sure the writing is legible because illegible handwriting can create misunderstandings or difficult issues in the future.