VAT Invoices in the UK: What You Need to Know

If you're a UK business owner or freelancer, understanding VAT invoicing is essential. Whether you're already VAT registered or approaching the threshold, this guide explains everything you need to know about creating compliant VAT invoices.

Do You Need to Charge VAT?

You must register for VAT if your taxable turnover exceeds £90,000 in any 12-month period (as of 2025/26). You can also voluntarily register below this threshold if you want to reclaim VAT on business expenses.

If you're not VAT registered, you should not charge VAT or show VAT on your invoices.

What Must a VAT Invoice Include?

HMRC requires full VAT invoices to include:

• Your business name, address, and VAT registration number
• The customer's name and address
• A unique invoice number
• The invoice date and tax point (usually the same)
• A description of goods or services
• The quantity and unit price (excluding VAT)
• The total amount excluding VAT
• The VAT rate applied to each item
• The total VAT amount
• The total amount including VAT

Simplified VAT Invoices

For invoices under £250, you can issue a simplified VAT invoice which only needs:

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

Common UK VAT Rates

The Flat Rate Scheme

If your VAT-inclusive turnover is under £150,000, you might benefit from the Flat Rate Scheme. Instead of tracking VAT on every purchase, you pay a fixed percentage of your turnover (which varies by industry). This simplifies your VAT returns significantly.

Tips for VAT Compliance

1. Keep copies of all invoices — HMRC requires you to keep records for 6 years.
2. Issue invoices within 30 days of the supply date (the tax point).
3. Use Making Tax Digital (MTD) — since April 2022, all VAT-registered businesses must file digitally.
4. Separate VAT from your pricing — always be clear whether quoted prices include or exclude VAT.

Need to create a VAT-compliant invoice? InvoiceForge handles tax calculations automatically — just set your VAT rate and we do the rest.