How to Invoice as a Sole Trader: What an Invoice Must Include (2026/27)

This guide is general information, not advice.

This is for sole traders sending their first invoices, or tidying up a template that has grown by accident. It follows what GOV.UK’s invoicing guide says an invoice must contain, then what you can do when a business customer pays late.

By the end you will have an invoice that meets the GOV.UK list, payment terms you can enforce, and the arithmetic for adding statutory interest and a fixed recovery fee to an overdue bill. Whether you should register for VAT at all is covered in the VAT registration guide, not here.

Before you start

Have these ready:

• your own full name and, if you use one, your business (trading) name
• an address where legal documents can be delivered to you - you must show it if you trade under a business name
• a contact email or phone number
• your customer’s name (or company name) and address
• a numbering scheme you will never reuse, for example 2026-001
• the date you delivered the goods or finished the service
• your VAT registration number, only if you are VAT registered

Step-by-step

1. Check your business name is allowed. GOV.UK’s set up as a sole trader guide says you can trade under your own name or another name, but a sole trader name must not include “limited”, “Ltd”, “limited liability partnership”, “LLP”, “public limited company” or “plc”, must not be offensive, and should not be too similar to another company’s trademarked name. It adds that you must include your name and business name, if you have one, on official paperwork such as invoices and letters.

2. Put in the nine standard fields. GOV.UK’s what invoices must include page lists them:

   • a unique identification number
   • your name, address and contact information
   • the name and address of the customer you are invoicing
   • a clear description of what you are charging for
   • the date the goods or service were provided (the supply date)
   • the date of the invoice
   • the amount or amounts being charged
   • the VAT amount, if applicable
   • the total amount owed

3. Add the sole trader extras. The same page says a sole trader’s invoice must also show your name and any business name being used, and “an address where any legal documents can be delivered to you if you are using a business name”. A trading name on its own is not enough.

4. State the payment terms. GOV.UK’s payment obligations page says you can set your own terms, such as early-payment discounts or payment upfront, and that the invoice must say when the customer must pay. For business customers, the late payment guide says an agreed payment date must usually be within 60 days (30 days for a public authority), and a longer period is allowed only if it is fair to both businesses. Writing a due date on the invoice removes any argument about when it became late.

5. If you are VAT registered, use a VAT invoice. HMRC’s VAT Notice 700/21 says you must issue one whenever you make a standard-rated or reduced-rated supply to another VAT-registered person, normally within 30 days of the supply. Section 4.1 adds details a plain invoice does not have: a sequential number, the time of supply, your VAT registration number, the quantity or extent of what was supplied, the unit price, the rate of VAT and the amount excluding VAT for each line, the rate of any cash discount, and the total VAT in sterling. Section 4.5 lets a business that is not a retailer issue a simplified invoice where the supply is £250 or less including VAT.

6. Send it and keep a copy. GOV.UK’s business records guide lists sales invoices among the proof you keep for your Self Assessment return.

7. If a business customer pays late, send a new invoice for interest and the fixed sum. The late payment guide says you can claim statutory interest and a fixed debt recovery sum, and to send a new invoice if you decide to add interest. It is optional: GOV.UK says you have the right to charge it “but you can choose not to”.

Deadlines and what happens next

When a payment is late. If you did not agree a payment date, GOV.UK says a business customer’s payment is late 30 days after either the customer gets the invoice or you deliver the goods or provide the service, whichever is later.

Statutory interest. GOV.UK sets it at 8% plus the Bank of England base rate for business-to-business transactions. You cannot claim it if your contract sets a different rate of interest, and you cannot use a lower rate in a contract with a public authority. The legal detail of which base rate to use is in article 4 of SI 2002/1675: the rate in force on 30 June applies to interest that starts to run between 1 July and 31 December, and the rate on 31 December to interest starting between 1 January and 30 June. Scotland has a parallel order, SSI 2002/336.

Fixed recovery sums. You can charge these once for each payment, on top of interest:

Amount of debt	What you can charge
Up to £999.99	£40
£1,000 to £9,999.99	£70
£10,000 or more	£100

A supplier can also claim reasonable costs each time it tries to recover the debt.

How long to keep invoices. GOV.UK says you must keep your records for at least 5 years after the 31 January submission deadline of the relevant tax year. VAT Notice 700/21 says VAT records are generally kept for at least 6 years.

Common mistakes

• Trading name only. GOV.UK requires your own name as well as the business name, plus an address for legal documents if you trade under the business name.
• Reusing or skipping numbers carelessly. Every invoice needs a unique number; a VAT invoice needs a sequential one.
• Adding interest to a consumer’s bill. The statutory interest and fixed sums in GOV.UK’s late payment guide are for late payments by another business.
• Claiming statutory interest when your contract has its own rate. GOV.UK says you cannot.
• Charging the fixed sum twice. It is once for each payment, whatever the number of reminders.

Worked example

Illustration only. It uses Bank Rate of 3.75%, which the Bank of England shows as unchanged since 18 December 2025 and held again on 17 September 2026. Re-check the rate before you use it.

A sole trader invoices a business customer £2,400 for design work, with no agreed payment date. The customer receives the invoice on 1 September 2026, so under GOV.UK’s 30-day default the payment is late from early October 2026. Interest therefore starts to run between 1 July and 31 December, and article 4 of SI 2002/1675 uses the rate in force on 30 June 2026: 3.75%.

Using the method in GOV.UK’s late payment guide:

Step	Working	Result
Statutory rate	8% + 3.75%	11.75%
Annual interest	£2,400 × 0.1175	£282.00
Daily interest	£282.00 ÷ 365	about 77p
Paid 45 days late	£282.00 × 45 ÷ 365	£34.77
Fixed recovery sum	debt between £1,000 and £9,999.99	£70.00
New invoice total	£2,400 + £34.77 + £70	£2,504.77

GOV.UK’s own example rounds the daily figure to the penny before multiplying; doing that here (45 × 77p) gives £34.65. Either way, the interest and the fee go on a new invoice.

Related reading

• VAT registration guide - when you must register and how, before any of the VAT invoice rules above apply.
• Self-employed tax calculator - what your invoiced income leaves after Income Tax and National Insurance.
• Self-employed first-year setup - business name, bank account and bookkeeping in the order you need them.