HMRC Invoice Requirements for UK Freelancers and Contractors

UK invoicing requirements depend on whether you're registered for VAT. Below the £90,000 threshold, the rules are relatively relaxed. Above it — or if you've voluntarily registered — you must issue compliant VAT invoices and keep detailed records for HMRC. This guide covers both situations.

VAT registration: the £90,000 threshold

You must register for VAT if your taxable turnover exceeds £90,000 in any rolling 12-month period (the threshold as of April 2024). You should also register if you expect your turnover to exceed this in the next 30 days alone.

Voluntary registration is available below the threshold. This can benefit you if your clients are VAT-registered businesses — they can reclaim the VAT you charge, and you can reclaim VAT on your business purchases.

Invoices if you're not VAT registered

If you're below the VAT threshold and not voluntarily registered, your invoices are standard invoices — not "VAT invoices". They must still be professional and include the basics:

• Your name (or business name) and address
• Your client's name and address
• A unique invoice number
• Invoice date
• Description of goods or services
• Total amount due
• Payment due date and bank details

You must not charge VAT or use the phrase "VAT invoice" if you are not registered — doing so is a criminal offence.

VAT invoice requirements

Once VAT-registered, every supply of taxable goods or services requires a full VAT invoice (with some exceptions for small amounts). A full VAT invoice must include:

• The word "VAT Invoice" — clearly labelled
• Your full business name and address
• Your VAT registration number (format: GB followed by 9 digits)
• Invoice number — unique and sequential
• Invoice date (tax point date)
• Your customer's name and address
• Description of the goods or services supplied
• Quantity and unit price of each item
• VAT rate charged (standard 20%, reduced 5%, or zero 0%)
• Total amount excluding VAT
• VAT amount charged
• Total amount including VAT

UK VAT rates

The standard VAT rate is 20%. Certain goods and services are charged at:

• 5% (reduced rate): domestic energy, mobility aids, children's car seats, certain health products
• 0% (zero rated): most food, books, children's clothing, public transport — taxable at 0%, not exempt
• Exempt: financial services, education, postage — no VAT charged and no VAT reclaimed

Most freelance services (design, development, consulting, writing) are standard-rated at 20%.

Making Tax Digital (MTD)

HMRC's Making Tax Digital programme requires VAT-registered businesses to keep digital records and submit VAT returns using compatible software. If you're VAT registered, you must use MTD-compatible software — you cannot manually enter figures into HMRC's portal.

From April 2026, MTD for Income Tax Self Assessment (MTD ITSA) begins rolling out for self-employed individuals earning over £50,000. This requires quarterly digital reporting of income and expenses, in addition to a final end-of-year declaration.

Self-employed: UTR and NI number

If you're self-employed in the UK, you'll have a Unique Taxpayer Reference (UTR) — a 10-digit number. You don't need to include it on invoices (unlike a VAT number), but you'll need it for Self Assessment tax returns. Keep it handy.

Record-keeping requirements

HMRC requires you to keep records for at least 5 years after the January self-assessment deadline of the relevant tax year (so effectively 5–6 years depending on timing). VAT records must be kept for 6 years. Digital records are acceptable.

Contractor invoicing through a limited company

If you operate through a limited company rather than as a sole trader, your invoices should show the company's registered name, company number, registered office address, and VAT number if applicable. You can't mix personal invoicing and company invoicing.