What is a sole trader invoice?

As a sole trader in the UK, you are legally required to issue invoices for any goods or services you provide to other VAT-registered businesses. Even if your clients are not VAT-registered, professional invoices protect you legally and help you track income for your Self Assessment tax return.

What must a UK sole trader invoice include?

According to HMRC, every invoice you issue should contain the following information:

  • A unique invoice number (sequential)
  • Your full name or business name and address
  • The client’s name and address
  • A clear description of the goods or services provided
  • The date the goods or services were supplied
  • The date of the invoice
  • The amount charged for each item
  • The total amount due

If you are VAT-registered, you must also include your VAT number, the VAT rate applied and the VAT amount charged separately.

Do sole traders need to charge VAT?

You only need to charge VAT if your taxable turnover exceeds the VAT registration threshold, which is £90,000 for the 2024/25 tax year. Below this threshold, VAT registration is optional. However, voluntary registration can be beneficial if your clients are VAT-registered businesses, as they can reclaim the VAT you charge.

What payment terms should I use?

The most common payment terms for UK freelancers and sole traders are:

  • Net 30 — payment due within 30 days of invoice date
  • Net 14 — payment due within 14 days
  • Net 7 — payment due within 7 days (common for smaller amounts)
  • Due on receipt — payment expected immediately

Under the Late Payment of Commercial Debts Act, you are legally entitled to charge 8% interest above the Bank of England base rate on overdue invoices from other businesses.

How to number your invoices

Invoice numbers must be sequential and unique. A common format is INV-2025-001, incrementing with each new invoice. Never reuse or skip numbers, as this can cause issues with your tax records. invly automatically generates sequential invoice numbers for you.

Common invoicing mistakes to avoid

  • Missing payment terms or due dates
  • Incorrect client details (address, company name)
  • Not keeping copies of all invoices issued
  • Forgetting to chase overdue payments promptly
  • Using inconsistent invoice numbering

Make invoicing easier with invly

invly is a free invoicing tool built specifically for UK sole traders and small businesses. Create professional PDF invoices in seconds, track payments, manage clients and never miss a due date. Start for free — no credit card required.