How to Invoice as a Sole Trader in the UK (With Example)

There is no legal requirement for a sole trader to have a separate business bank account, but it makes bookkeeping and your Self Assessment much easier. Some banks' terms also restrict using a personal account for business transactions, so check yours. Whichever account you use, show the account name, sort code and account number exactly as they appear on every invoice.

No. Your Unique Taxpayer Reference is not required on a sole trader invoice and is best kept private, as it is used for dealing with HMRC. The exception is the Construction Industry Scheme, where contractors ask subcontractors for their UTR to verify them, but that is shared directly with the contractor rather than printed on each invoice.

At the time of writing, you must register for VAT if your VAT-taxable turnover goes over £90,000 in any rolling 12-month period, or you expect it to in the next 30 days alone. The threshold has been £90,000 since April 2024. It can change at a Budget, so check the current figure on GOV.UK before relying on it.

It does not change what goes on an invoice, but it changes your record keeping. Making Tax Digital for Income Tax applies from April 2026 to sole traders and landlords with qualifying income over £50,000, from April 2027 over £30,000 and from April 2028 over £20,000. If it applies, you must keep digital records and send quarterly updates using compatible software.

For business-to-business debts, you can usually claim simple interest at 8% above the Bank of England base rate, plus fixed compensation of £40 for debts under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more. These rights do not apply to consumers. Check GOV.UK for the base rate that applies to your debt's period.

Yes. The same invoice details apply, but consumers have stronger legal protections than businesses, and statutory late payment interest does not apply to them. Set out your price, payment terms and any deposit clearly before you start, ideally in writing. For some work agreed away from your premises, consumers may also have cancellation rights, so check the Consumer Contracts Regulations guidance.

No, you can invoice before registering, but you must tell HMRC you are self-employed. Generally, you need to register for Self Assessment by 5 October after the end of the tax year in which you started trading. If your gross trading income is £1,000 or less in a tax year, the trading allowance may mean you do not need to register.

Yes, you can invoice in any currency agreed with your client. For your tax records, convert the income to pounds using a reasonable and consistent exchange rate. If you are VAT-registered and charge UK VAT, the VAT amount must also be shown in sterling on the invoice. Show the currency code clearly, such as EUR or USD, to avoid confusion.

Your invoice should show an address where you can be contacted and where documents can be served, which for many sole traders is their home. If you prefer not to share it, you can use a genuine business address, such as a rented office or a business address service, as long as post sent there reaches you. Check any service's terms before using it.

Many sole traders use 14 or 30 days, agreed in writing before the work starts. If you invoice a business and no payment date was agreed, the late payment rules generally treat the debt as late 30 days after the customer receives the invoice or the goods or services, whichever is later. Always write the actual due date on the invoice.