Invoicing as a Sole Trader - Complete Guide for the UK

If you’re setting up a business as a sole trader, you’ll need to get to grips with invoicing. It can be tricky at first, as you establish your own process and make sure you include everything that your client requires.

As your business grows and you have more clients, you’ll also need to find ways to streamline the invoicing process. Luckily, there are tools available to help.

In this guide, we’ll run through all the essentials you need to know about invoicing as a sole trader. This includes how to create an invoice, what to include and some info on invoicing international clients from the UK.

We’ll also touch on an easy way to get paid in any currency, with a Wise Business account.

💡Learn more about Wise Business

How to invoice as a sole trader

As a UK sole trader, invoicing is just as important a part of running your business as the products and services you provide.

Not only does it ensure you get paid, but it’s also required by law - if you and your client are registered for Value Added Tax (VAT). Once you sell a product or service to a customer, you’re legally obligated to give them an invoice.

Even if you’re not registered for VAT (if your annual income falls under the threshold for VAT, for instance), it’s still good practice to issue prompt invoices after providing your services.

An invoice can be a simple document created using your word processing software, or you can create them through business tools. For example, you can quickly and easily generate invoices with Xero, or other accounting tools such as Sage or Quickbooks.

It doesn’t matter how you create an invoice as long as the key information is included. We’ll cover key invoicing details next.

What to include on an invoice?

There are certain things that must be included on a sole trader invoice in the UK. Some are essential for yours and your client’s record-keeping and accounting requirements, and to ensure you get paid properly. Others are legally required, especially if you’re VAT-registered and must issue invoices by law.

Here are the basic details that must be invoiced on a UK invoice:¹

• Your name and business name (if applicable)
• Your registered business address and contact information
• The company name and address of the client you’re invoicing
• The supply date - this is the date the products or services were provided
• The invoice date - the date the invoice is being issued
• A unique identification or reference number - this is important for accounting purposes, and it’s also the reference the client will use when paying the invoice.
• A clear description of the products or services the invoice covers
• The total amount being charged, including a breakdown of VAT or any other additional costs.

It’s also crucial to include the date you expect the invoice to be paid, according to your payment terms agreed between you and your client.

And of course, you should include your full payment details. You’ll likely want to include your bank details or Wise Business account details on all invoices, but may also mention other options if you accept payment in different forms.

💡Learn more about Wise Business

Now, let’s move on to how to write an invoice in the UK. If it’s your first one, it’s a good idea to use an invoice template suitable for your line of work. Wise has a free invoice template available to download and use here.

How to write an invoice in the UK

1. Download the invoice template
2. Copy or ‘save as’ into a new document - make sure to rename this properly to suit your accounting records.
3. Change the details, adding in your company name, contact information and the details of the client you’re invoicing. Add a new unique reference number and update the dates accordingly. You might also want to upload your company logo if you have one.
4. Enter the details of the products or services you’re invoicing for. This should include an itemised breakdown of the work and amounts being charged.
5. Add the total amount being charged, including breakdown of VAT if applicable.
6. Add your bank details, or other details for payment (for example, cheque if you accept this as a payment method)
7. Double-check all of the amounts and details very carefully before sending.
8. Save your new invoice as a PDF - this will make it uneditable, as well as compact and searchable. You can also password protect PDF invoices if needed.

How to invoice international clients from the UK

It’s a little more complicated to invoice clients based in other countries. Firstly, you need to check whether your international clients have any particular requirements when it comes to the invoicing process.

There may be details you need to pay extra attention to due to the regulations in their country. For example, when invoicing EU customers from the UK, you need to adhere to EU regulations.

You also need to make sure you’re invoicing in the right currency. This is something you’ll need to agree with your client in advance, if you both have different currencies in your respective home countries.

How to create an international invoice from the UK

1. Firstly, check with your client which currency you should be invoicing in, if this hasn’t already been agreed between you
2. Adapt your usual invoice template, saving it into a new document and labelling it appropriately
3. Change the details, adding in your company name, contact information and the details of the client you’re invoicing. Add a new unique reference number and update the dates accordingly.
4. Enter the details of the products or services you’re invoicing for. This should include an itemised breakdown of the work and amounts being charged.
5. Add the total amount being charged.
6. Add your bank details, or other details for payment. When invoicing international clients, you might want to use an alternative payment method such as Wise Business to mitigate any potential losses from foreign exchange rates or currency conversion fees.
7. Double-check all of the amounts and details very carefully before sending.
8. Save your new invoice as a PDF - this will make it uneditable, as well as compact and searchable. You can also password protect PDF invoices if needed.

Payment details on invoice with Wise Business

One easy way to get paid by clients in different currencies is with a specialist solution such as Wise Business.

When you sign up with Wise, you’ll receive local bank details in multiple major currencies such as EUR and USD. Then all you need to do is provide the right details (depending on where your client is based) on your invoice. Your client can pay you in their own currency, just like you’re also based in their country.

You can then convert the funds to GBP for a small fee and at the mid-market exchange rate, leave it in your Wise Business balance to earn you a return, or use it for other business expenses.

You can even request payments by sharing a payment link with your client. It’s the quick, easy and cost-effective way to get paid as a UK sole trader with international clients.

Get started with Wise Business 🚀

When and how to send an invoice

Timing is everything with invoicing, especially when you’re a sole trader. You need to agree payment terms with your client before you start work, so that everyone is on the same page. This is essentially how long your client has to pay after an invoice has been issued, and the payment method they’ll use.

It’s very important to invoice promptly after providing goods or services, so that you can be paid on time.

Email is one of the most common ways to send over an invoice, but you can also generate and issue them automatically using accounting software.

The email only has to be brief, including the key facts such as the invoice number and due date.

Hi [Recipient name],
Please see attached invoice number [invoice number] for [product/service name], due for payment by [invoice due date]. Please feel free to get in touch if you have any questions. Thanks in advance for prompt payment.
Kind regards,
[Sender name]

Receive payments with ease - Meet Wise Business

Wise Business is the ideal solution for sole traders in the UK to manage their business finances with ease. If you do any business internationally, Wise can make it easier and more cost-effective to get paid in multiple currencies.

With your Wise Business account, you can invoice and request payment in just a few clicks. Your client can pay in their preferred currency, and you can convert the funds back to your own currency for just a low fee. Best of all, you’ll be able to do all conversions at mid-market exchange rates, which is better than most banks.

This means you get to keep more of your hard-earned money.

You can use Wise Business to send payments worldwide, and spend on your own Wise international debit card. You can also integrate it seamlessly with your accounting tools using the powerful Wise open API.

Get started with Wise Business 🚀

Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up to date pricing and fee information.

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After reading this guide, you should be all set to create your first invoice as a sole trader. You’ll now know how to get started, what key details to include and how to get paid in any currency.

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Sources used:

1. GOV.UK - Invoicing and taking payment from customers

Sources last checked on date: 11-Sep-2023