Country Guide

How to invoice in the United Kingdom

The UK has its own VAT system, separate from the EU since Brexit. Making Tax Digital is reshaping how businesses handle tax. This guide covers what you need to invoice correctly in the UK.

Why UK invoicing rules matter

Since Brexit, the UK operates its own VAT regime independent of the EU. HMRC (His Majesty's Revenue and Customs) enforces strict invoicing requirements, and the Making Tax Digital (MTD) programme is progressively digitalising tax compliance. The VAT registration threshold of 90,000 GBP means many businesses must charge VAT. Cross-border trade with the EU now involves customs declarations and import VAT. Getting your UK invoicing right avoids HMRC penalties, speeds up VAT reclaims, and keeps your international trade running smoothly.

Key tax and invoicing facts

VAT rates

Standard rate is 20%. Reduced rate of 5% applies to domestic energy, child car seats, and certain renovations. Zero rate (0%) covers food staples, children's clothing, books, and public transport.

VAT registration

UK VAT numbers follow the format GB + 9 digits. Registration is mandatory when taxable turnover exceeds 90,000 GBP in any rolling 12-month period. Voluntary registration is possible below this threshold and can benefit businesses that reclaim significant input VAT.

Making Tax Digital (MTD)

MTD requires businesses to keep digital records and submit VAT returns through MTD-compatible software. Since April 2022, all VAT-registered businesses must comply. MTD for Income Tax Self Assessment rolls out from April 2026 for sole traders and landlords above 50,000 GBP.

Post-Brexit rules

Since January 2021, the EU reverse charge no longer applies to UK-EU trade. Goods exported to the EU are zero-rated but require customs documentation. Services follow place-of-supply rules. UK businesses selling to EU consumers may need EU VAT registration.

Common payment methods

BACS (Bankers Automated Clearing Services) and Faster Payments are the standard B2B methods. BACS takes 3 working days; Faster Payments is near-instant. CHAPS is used for high-value same-day transfers. Direct debit covers recurring payments. International transfers often use SWIFT.

Currency

Pound Sterling (GBP). Domestic invoices should be in GBP. Invoices can be issued in foreign currencies, but VAT must be converted to GBP using HMRC's published exchange rates or the market selling rate at the time of supply.

Required invoice fields in the UK

A unique invoice number from a sequential series
Your business name and address
Your VAT registration number (GB + 9 digits)
Date of issue
Tax point (date of supply) if different from invoice date
Customer's name and address
Description of goods or services supplied
Quantity of each item or extent of services
Rate of VAT per item (20%, 5%, or 0%)
Total amount excluding VAT
Total VAT amount
Total amount including VAT
Unit price for each item
Rate of any cash or settlement discount
Currency of the amounts if not GBP

Invoicing guides for neighboring countries

Ireland

Netherlands

France

United States

Questions

When must I register for VAT in the UK?

You must register when your taxable turnover exceeds 90,000 GBP in any rolling 12-month period, or if you expect it to exceed this amount in the next 30 days. Non-UK businesses making taxable supplies in the UK must register from the first supply, with no threshold. Voluntary registration is possible at any level of turnover.

What changed for invoicing after Brexit?

The EU reverse charge mechanism no longer applies to UK-EU transactions. Exports to the EU are zero-rated but require customs declarations. Imports from the EU are now subject to import VAT. You may need to use postponed VAT accounting to avoid cash flow issues on imports. EC Sales Lists are no longer required.

What are simplified invoices in the UK?

For supplies under 250 GBP including VAT, you can issue a simplified invoice. It only needs your name, address, VAT number, the date, a description of goods or services, the total including VAT, and the VAT rate. Simplified invoices cannot be used for cross-border transactions.

How does Making Tax Digital affect my invoicing?

MTD requires digital record-keeping and digital submission of VAT returns. Your invoicing software must be MTD-compatible or connect to HMRC's systems via API. Manual entry into HMRC's portal is no longer allowed for most businesses. Billstride supports MTD-compatible record keeping.

How long must I keep invoices in the UK?

6 years. HMRC requires all VAT records, including issued and received invoices, to be kept for at least 6 years. Digital records are accepted and encouraged under MTD. If HMRC is investigating, they may require records to be kept longer.

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