Self-Employed Invoice Requirements in the UK: What HMRC Expects

If you're self-employed in the UK, invoicing isn't just good practice — it's a legal requirement. HMRC expects you to issue invoices for the work you do, keep accurate records of your income and expenses, and retain those records for a minimum number of years. Getting this wrong can lead to penalties, failed tax returns, and unnecessary stress during an HMRC enquiry.

This guide explains exactly what HMRC requires from self-employed invoices, the difference between VAT and non-VAT invoices, record keeping obligations, and how Making Tax Digital affects your invoicing in 2026 and beyond.

Are Self-Employed People Legally Required to Issue Invoices?

Strictly speaking, there is no law that says every self-employed person must issue an invoice for every transaction. However, HMRC requires you to keep "adequate records" of all your business income and expenses. In practice, this means you need invoices — both the ones you send to clients and the ones you receive from suppliers.

If you're VAT registered, the rules are stricter: you must issue a VAT invoice for every taxable supply you make to another VAT-registered business. Failing to do so is a breach of VAT regulations and can result in penalties.

Even if you're not VAT registered, issuing proper invoices is strongly recommended. They serve as evidence of income, make your Self Assessment tax return straightforward, and protect you if HMRC ever opens an enquiry into your finances.

What HMRC Requires on a Self-Employed Invoice

While HMRC doesn't prescribe an exact invoice format, it expects certain information to be present. A compliant self-employed invoice should include:

• Your name or business name — the name you trade under, which may be your personal name or a registered trading name
• Your contact details — address, email, and optionally a phone number
• The client's name and address — the person or business you're billing
• A unique invoice number — sequential and non-repeating (e.g., INV-001, INV-002)
• The invoice date — when the invoice was issued
• A description of the goods or services — specific enough that someone could understand what was provided
• The amount charged — broken down by line item if there are multiple services
• The total amount due — clearly stated
• Payment terms — when payment is due (e.g., Net 14, Net 30, Due on Receipt)
• Payment details — bank account sort code and account number, or other accepted payment methods

If you're not VAT registered, you should not include a VAT number or show VAT as a separate line. Doing so can mislead clients into thinking you're VAT registered when you're not, which is a serious compliance issue.

Invoices for VAT-Registered vs Non-VAT-Registered Self-Employed

The invoicing requirements differ significantly depending on whether you're VAT registered.

If you're NOT VAT registered (taxable turnover below £90,000), your invoices are simpler. You do not charge VAT, so your prices are VAT-exclusive by default. Your invoice does not need a VAT number, VAT rate, or separate VAT amount. The total you show is the total the client pays.

If you ARE VAT registered (mandatory above £90,000, or voluntary below), your invoices must comply with HMRC's VAT invoice requirements. In addition to the standard elements listed above, a full VAT invoice must also include:

• Your VAT registration number
• The tax point (usually the invoice date or the date of supply)
• The net amount (before VAT) for each line item
• The VAT rate applied to each item (usually 20% standard rate)
• The total VAT amount
• The gross total (net amount plus VAT)

Getting these details right matters. Your VAT-registered clients need correct VAT invoices to reclaim VAT on their own returns. An incorrect or incomplete VAT invoice can prevent them from doing so, which damages the business relationship.

Simplified Invoices vs Full VAT Invoices

If you're VAT registered and the invoice total is under £250 (including VAT), you can issue a simplified VAT invoice instead of a full one. A simplified invoice only needs to include:

• Your name, address, and VAT registration number
• The date of the supply
• A description of the goods or services
• The total amount charged including VAT
• The VAT rate applicable

You do not need to show the client's name and address, a separate VAT amount, or a breakdown of net and gross totals on a simplified invoice. This makes them quicker to produce for small transactions like individual consulting sessions or minor supply orders.

However, if your client specifically requests a full VAT invoice — even for amounts under £250 — you must provide one. Some businesses require full invoices regardless of the amount for their own accounting purposes.

Record Keeping Requirements: The 6-Year Rule

HMRC requires all self-employed individuals to keep business records for at least 5 years after the 31 January submission deadline of the relevant tax year. In practice, this means you should keep records for approximately 6 years to be safe.

The records you must keep include:

• All sales invoices you've issued
• All purchase invoices and receipts for business expenses
• Bank statements for business accounts
• Records of any other business income (cash payments, PayPal, etc.)
• Mileage logs if you claim vehicle expenses
• Any contracts or agreements related to your work

You can keep these records digitally — you don't need paper copies. PDF invoices stored on your computer or in cloud storage are perfectly acceptable, provided they're legible, complete, and backed up. HMRC's guidance explicitly states that electronic records are valid as long as they can be produced on request.

If HMRC opens an enquiry and you cannot produce adequate records, you may face penalties and HMRC may estimate your income — usually in their favour, not yours.

Making Tax Digital (MTD) and How It Affects Your Invoicing

Making Tax Digital is HMRC's programme to move all tax reporting online. Here's how it affects self-employed invoicing in 2026:

MTD for VAT has been mandatory for all VAT-registered businesses since April 2022. If you're VAT registered, you must already be keeping digital records and filing your VAT returns through MTD-compatible software. Your invoices should be created and stored digitally as part of this process.

MTD for Income Tax Self Assessment (ITSA) is being rolled out in phases. From April 2026, self-employed individuals and landlords with a gross income over £50,000 will need to use MTD-compatible software to keep digital records and submit quarterly updates to HMRC. Those earning over £30,000 will follow from April 2027.

What does this mean for your invoices? Under MTD for ITSA, you'll need to:

• Keep all income and expense records digitally (not in paper ledgers)
• Submit quarterly summaries of your income and expenses to HMRC
• File an end-of-period statement and final declaration instead of the traditional Self Assessment return

Your invoices don't need to change format, but they do need to be stored in a way that feeds into your digital record-keeping. If you're creating PDF invoices, make sure you're also logging the amounts in MTD-compatible accounting software or a digital spreadsheet that links to your filing process.

Invoice Numbering Rules for Self-Employed

HMRC requires invoice numbers to be unique and sequential. This doesn't mean they have to be simple numbers (1, 2, 3) — you can use any format that makes sense for your business, as long as no two invoices share the same number.

Common formats include:

• Simple sequential — INV-001, INV-002, INV-003
• Year-based — 2026-001, 2026-002 (resets each year)
• Client-coded — ACME-001, ACME-002 (useful if you have few clients)
• Date-based — 20260210-01 (date plus sequence number)

The most important thing is consistency. Pick a format and stick with it. Gaps in your sequence are fine (if you void invoice INV-005, you don't need to reuse the number), but duplicates are not.

Common Mistakes Self-Employed People Make with Invoices

After helping thousands of self-employed professionals create invoices, these are the mistakes we see most often:

• Showing VAT when not VAT registered — this is a serious compliance issue. If you're not registered, do not add VAT to your invoices or display a VAT number.
• Missing payment details — an invoice without bank details or a payment link makes it harder for clients to pay you. Always include clear instructions on how to pay.
• Vague descriptions — "Consulting services" or "Work done in January" is not specific enough. Describe what you delivered: "Brand strategy workshop — 4 hours" or "Website redesign — homepage and 3 landing pages."
• No due date — without a due date, the client has no deadline. Always specify when payment is expected.
• Not keeping copies — some self-employed people send invoices by email and don't save a copy. Always keep a PDF or digital record of every invoice you issue.
• Inconsistent numbering — skipping numbers randomly, reusing numbers, or changing your numbering format mid-year makes your records look disorganised and raises questions during an HMRC review.
• Forgetting to invoice at all — this sounds unlikely, but it happens — especially with small jobs or informal arrangements. Every piece of work should be invoiced, even if payment has already been made.
• Mixing personal and business details — if you trade under a business name, use that name consistently on invoices. Don't alternate between your personal name and trading name.

What Happens If HMRC Finds Problems with Your Invoices?

If HMRC reviews your records and finds issues with your invoicing, the consequences depend on the severity:

• Minor errors (e.g., missing details on a few invoices) — HMRC may issue a warning and ask you to correct your processes going forward
• Inadequate records — HMRC can charge a penalty of up to £3,000 for failing to keep adequate records
• Estimated assessments — if your records are too poor to determine your actual income, HMRC will estimate it — and these estimates are typically higher than your actual earnings
• VAT penalties — issuing incorrect VAT invoices or failing to issue them when required can result in financial penalties and interest charges

The best protection is straightforward: issue proper invoices, keep copies of everything, and store your records for the required period.

Create HMRC-Compliant Invoices with InvoiceForge

InvoiceForge makes it simple to create professional invoices that meet HMRC requirements. Enter your details, add your line items, set your tax rate (or leave it off if you're not VAT registered), and download a clean PDF invoice in seconds. Every invoice includes all the fields HMRC expects — unique numbering, clear descriptions, itemised totals, and payment details.

Whether you're a sole trader, freelancer, or contractor, having a reliable way to generate compliant invoices saves you time and keeps you on the right side of HMRC.