VAT invoice guide for UK businesses

As a Value Added Tax (VAT) registered business in the UK, you’re required to issue a VAT invoice to your customers - unless your goods or services are exempt from VAT. This establishes your VAT liability on the supply of goods and services, as well as enabling your VAT registered customers to reclaim the VAT charged to them.

But how do you create a UK VAT invoice, and what should be included? We’re here to help, with a guide to the VAT invoice requirements in the UK and tips for best practice.

And when it comes to collecting both domestic and international payments, you might want to sign up for a Wise Business account. This gives you account details for 8+ currencies, so that customers can pay you in their own currency without any additional fees.

💡 Learn more about Wise Business

What is a VAT invoice?

A Value-Added Tax (VAT) invoice is a document issued by a VAT-registered business to its customers. It sets out the details of a taxable supply of goods or services, and includes all related information as prescribed by VAT law in the UK.

It is used in place of a standard invoice, and the main difference between the two is that a VAT invoice provides additional details of the sales taxes which apply.

Crucially, a VAT invoice only needs to be issued if both businesses - the supplier and the buyer - are VAT registered businesses.

You’ll need to register for VAT with HM Revenue and Customs (HMRC) if your company’s taxable turnover in a rolling 12-month period is more than £90,000. This is known as the VAT threshold. Businesses which are outside the UK but supply goods or services to the UK must also register for VAT.¹

Some goods and services are exempt from VAT or zero-rated. If most of what you sell falls into this category, you may not be required to register for VAT - it’s best to contact HMRC or get expert tax advice to find out more about this.

Find out more about how VAT works here.

Types of VAT invoices

There are a few different types of VAT invoices:²

• Full VAT invoice - this is the most common form of VAT invoice, including all of the required information .
• Simplified VAT invoice - as the name suggests, this is a shorter, simpler version of the full VAT invoice. It doesn’t go into as much detail or include as much information. It can only be used for smaller sales up to £250.
• Modified VAT invoice - this is similar to a full VAT invoice, but is only issued for sales over £250 that include taxable products. It should feature all of the information that’s on the full invoice, but prices and totals will be inclusive of VAT.

If in doubt about which invoice type you should use, it’s always safest to go for the full VAT invoice.

HMRC VAT invoice requirements

To meet HMRC’s VAT invoice requirements, you must make sure that you include all of the required information - we’ll cover what should be included next. The information must be accurate and complete, without anything missing.

It’s mandatory to issue VAT invoices if both you and your customer are registered for VAT, or if your business is based outside the UK but sells goods or services to the UK.

Usually VAT invoices must be issued within 30 days of the date of supply, or the date of payment (if you’re paid in advance).³

What should be included on a VAT invoice?

VAT invoices should include the following mandatory information:³

• A unique invoice number - this should be sequential (following on from the previous invoice)
• Your business name and registered company address
• Your VAT registration number
• Invoice issue date
• Date of supply for goods or services
• Your customer’s name and registered company address
• A description of the goods or services provided
• The quantity of each item
• The rate of any discount offered
• The unit price per item (excluding VAT) and the rate of VAT charged per item
• The total amount due (excluding VAT) and the total amount of VAT due.

You can give the gross total amount payable in any currency, but the total of VAT chargeable must be expressed in Sterling (GBP).

Best practices for VAT invoicing

The best way to make sure that your VAT invoices are fully HMRC-compliant is to use online bookkeeping software. Some of the most popular in the UK are accounting tools like QuickBooks, Xero, Sage, FreshBooks and Zoho Books. Most of this software will provide invoicing tools, including the option to create and send VAT invoices.

Crucially, you’ll need to choose software that is compliant with HMRC’s Making Tax Digital (MTD) rules - as it will also need to help you submit VAT returns.

Best practice tips to remember for VAT invoicing include the following:

• If unsure which type of VAT invoice to issue, opt for a full VAT invoice - this will guarantee that all of the required information is included.
• Implement robust systems and staff training for issuing VAT invoices, to make sure they’re issued according to the 30 day deadline and with all the required information included.
• If you’re not using invoicing software, it’s best to create a template to use for all VAT invoices.
• Make sure you’re aware of how long you need to keep digital copies of VAT invoices and other records, according to rules set out by HMRC.

Receive international payments with Wise Business

If you trade internationally and issue invoices for customers overseas Wise Business can help you get paid by customers in multiple currencies, with low fees and the mid-market exchange rate.

Your Wise Business account comes with local account details to get paid in 8+ major foreign currencies like Euros and US Dollars just as easily as you do in Pounds.

All you need to do is pass these account details to your customer, or add them to invoices, and your customer can make a local payment in their preferred currency. You can also use the Wise request payment feature to make it even easier and quicker for customers to pay you.

Get started with Wise Business 🚀

FAQs - VAT invoicing

Can a proforma invoice be a valid VAT invoice in the UK?

A proforma invoice - a preliminary or estimated invoice sent before a sale is complete - can not be used as a valid and compliant VAT invoice in the UK.⁴

Instead, you’ll need to issue another full, finalised VAT invoice after the sale is complete.

How long do I need to keep VAT invoices in the UK?

According to HMRC, UK businesses are required to keep all VAT invoices and all other records for VAT purposes for at least 6 years.³

Can I issue VAT invoices in a foreign currency?

You can issue VAT invoices in a foreign currency, but the following must be in Sterling (GBP):⁵

• The total net value of goods and services at each VAT rate
• The amount of VAT at each rate (if any).

Are digital VAT invoices acceptable in the UK?

Yes, digital VAT invoices are acceptable in the UK, as long as they contain the same information as paper invoices. Businesses must also adhere to HMRC’s Making Tax Digital (MTD) guidelines on creating and sending VAT invoices, filing and keeping records.

Here, we’ve covered all the essentials you need to know about creating and sending UK VAT invoices. We’ve looked at what information you need to include, HMRC VAT invoice requirements in the UK, best practice tips and the answers to commonly asked questions.

You should now have all the information you need to send your first VAT invoice. But it could also be sensible to get expert advice from a business tax specialist, or speak to HMRC directly if you have any questions.

Sources used:

Sources last checked on date: 30-Jul-2025

Disclaimer: The UK Wise Business pricing structure is changing with effect from 26/11/2025 date. Receiving money, direct debits and getting paid features are not available with the Essential Plan which you can open for free. Pay a one-time set up fee of £50 to unlock Advanced features including account details to receive payments in 22+ currencies or 8+ currencies for non-swift payments. You’ll also get access to our invoice generating tool, payment links, QuickPay QR codes and the ability to set up direct debits all within one account. Please check our website for the latest pricing information.