Updated on: Oct 3, 2023
For most people, gone are the days of laboriously creating invoices from scratch. That is not to say it still doesn’t happen and in fact I still get manually prepared invoices from time to time from suppliers. But these days there is not really any excuse not to harness the power of technology to simplify and streamline the invoicing process.
A professional, well-structured invoice not only reflects your brand, but also ensures that you get paid accurately and on time.
In this blog post, we’ll guide you through various invoice template UK formats, the VAT rules for those who are VAT registered, and the advantages of using invoicing software. We’ll also discuss customizing your invoice template, including adding your company logo and bank details, to facilitate efficient payment from your clients.
Do you just want to get straight to our templates? See below to get started and create a UK invoice template for your own business.
(a) Excel / Google Sheets invoice template for a VAT registered business.
(b) Excel / Google Sheets invoice template for a non-VAT registered business.
Key Takeaways
- Create professional-looking UK invoices with free & customizable templates in 2023.
- Understand VAT rules, registration process and different rates for compliant invoicing.
- Streamline processes using invoice software, customize template and add logo to create a branded look.
UK Invoice Templates: Free & Professional
Choosing a good invoice template is a fundamental step to a successful invoicing process. A well-designed template ensures that all the essential information is included and presented in an organized manner. Thankfully, I have prepared for you a free UK invoice template, catering to every type of business, from freelancers and sole traders to larger, VAT-registered enterprises (though I would be really surprised to learn if a large (or even medium) sized organisation would be looking for an invoice template!). Regardless of the format you choose, generating an invoice using our free invoice template is a breeze—merely input the necessary details, such as:
- client and business information
- dates of work
- invoice number (these must be unique)
- description of work or service provided
- applicable VAT
Our UK invoice templates, including VAT invoice options, are available in two formats, Excel, and Google Sheets. Choosing the right UK invoice template for your business can make a significant difference in streamlining your invoicing process. We will now examine the benefits and use cases of each format in detail.
Excel Invoice Templates
Excel invoice templates offer numerous advantages, such as:
- Reduced training time if you already know how to use Excel
- Uniformity in the appearance of invoices
- Seamless integration with Excel files
- Quick creation of professional-looking invoices
- Built-in formulas and functions for automated calculations, reducing the likelihood of errors.
The process of creating an Excel invoice template is simple. Here are the steps:
- Download our Excel spreadsheet here, for VAT registered businesses, and non-VAT registered businesses.
- Input your company’s name, address, at the top right.
- Add the invoice number, date, and due date.
- Include the client details.
- List the items or services provided.
- Add your business banking details, and specify the payment terms.
- Customize any fields and add images or logos to create a template that suits your business needs.
Google Sheets Invoice Templates
For those who prefer a cloud-based solution, Google Sheets is a fantastic option. Our Google Sheets templates are identical to the Excel versions. These templates offer the flexibility of creating and sharing UK invoices from any device with internet access. Additionally, multiple users can collaborate on a single invoice in real-time, making it easier to update and finalize invoices as a team.
Our Google Sheets invoice templates come with customizable fields, automatic calculations, and the capacity to add images and logos. With the added benefits of security and easy sharing, Google Docs invoice templates are an excellent choice for any UK business.
Download our Google Sheets document here, for VAT registered businesses, and non-VAT registered businesses.
PDF UK Invoice Templates
PDF invoice templates are popular due to their simplicity and ease of use. Since PDF format is widely accepted and easily accessible, sending a PDF invoice to your client ensures that they can view and download the invoice without any compatibility issues. Furthermore, PDF invoices are also easy to print, making them suitable for businesses that require physical copies of their invoices.
We recommend using our Excel of Google Sheets templates for actually creating the invoice, and then save as a PDF (or print to PDF) if you want to distribute the invoice as a PDF. This way you still get all the layout and calculation flexibility before the actual PDF document is created.
Understanding UK VAT Rules for Invoicing
Understanding the VAT rules that apply to invoicing is key to ensuring your invoices comply with UK regulations. Here are the key points to remember.
- VAT is a tax collected from the seller at each stage of the goods’ value chain.
- As a business, you’re responsible for collecting VAT from customers at the point of sale.
- You need to remit the collected VAT to HMRC when filing your VAT return.
We will briefly explore the UK VAT registration process, the various VAT rates, and the difference between VAT invoices and non-VAT invoices in this section. Being well-versed in these rules will not only help you stay compliant, but also ensure that your invoicing process runs smoothly.
VAT Registration Process
In the UK, businesses must register for VAT if their VAT taxable turnover is greater than £85,000. This registration is mandatory. To register for VAT, you must submit an online application to HMRC, providing the necessary information about your business, such as your company name, address, and contact details.
Once registered, you will receive a VAT registration certificate, which includes your VAT number, the date for submitting your first VAT return and payment, and the effective date of registration. With your VAT number, you can now issue VAT invoices and collect the appropriate VAT on your sales.
For all the details on VAT registration please see A Comprehensive Guide to VAT Registration.
VAT Rates in the UK
There are three VAT rates in the UK, and the rate that you use depends on the type of product or service you are supplying. The correct rate of VAT is then applied to the net taxable value of goods and services provided.
- Standard VAT rate: 20% – applies to most goods and services.
- Reduced VAT rate: 5% – applicable to certain goods and services, such as energy-saving materials and mobility aids for the elderly.
- Zero rate – applicable to most essential food and drink items. It also applies to some children’s goods.
Grasping these different VAT rates is vital in determining the correct rate to apply to your sales and in ensuring your invoices comply with UK regulations. Always keep yourself updated with the latest VAT rates to avoid discrepancies in your invoicing process.
VAT Invoices vs. Non-VAT Invoices
It’s important to distinguish between VAT invoices and non-VAT invoices. VAT invoices are issued by businesses registered for VAT and include the applicable VAT charges on supplies. On the other hand, a non-VAT invoice is used by businesses that are not VAT registered. You can create a non-VAT invoice online using our Google Sheets template.
Being aware of when to use each type of invoice is key to adhering to UK VAT rules. Using the appropriate invoice format not only helps you accurately charge and collect VAT, but also ensures that your invoices are easily understood and accepted by your clients.
Fortunately it’s very easy to remember. If you are not a VAT registered business then your invoices will not include for any VAT. And once you become a VAT registered business you must include VAT on all of your invoices for work performed from the VAT registration start date onwards.
Creating a Compliant UK Invoice
Having gone through the various invoice templates and UK VAT rules, we can now proceed to create a compliant UK invoice. A compliant invoice includes all the necessary elements, such as:
- Invoice number
- Your business name, and contact details
- The business name, and contact details for the customer you are invoicing
- Description of goods and/or services provided
- The date that the goods or services were supplied
- The amount being charged, and total amount owed
- VAT amount (if VAT registered)
By including all the required information, you minimize the risk of disputes and ensure that your invoices are paid on time.
Contact Details and Business Name
Accurate contact details and business names are essential components of a compliant UK invoice. Including your business name and contact information, such as address, phone number, and email address, not only validates the invoice for tax purposes, but also ensures that it reaches the right recipient.
While it may seem like a small detail, ensuring that your contact information is correct and up to date can significantly impact your invoicing process. Accurate information reduces the likelihood of payment delays and helps maintain a professional image for your small business.
Accurate details supplied here ensures there is no confusion from your customer about who the invoice is from and how to get in touch with you.
Invoice Number and Date
For effective record-keeping, it’s fundamental to have unique invoice numbers and accurate invoice dates. Invoice numbers help you identify and track invoices, while invoice dates are used to determine when the invoice was issued and when payment is due.
To generate a unique invoice number, some businesses will add a prefix or suffix, such as the year, to ensure its distinctiveness. The invoice date should be the date the invoice was issued, typically the date the goods or services were provided or the invoice was generated.
Invoice dates are also important from an accounting perspective because the income is typically recognised in the accounts on the invoice date.
Services Provided and Payment Terms
Clear descriptions of the services provided and payment terms are useful components of a compliant UK invoice. By outlining the services provided and the associated costs, you ensure that your clients understand what they are being billed for, reducing the likelihood of disputes and facilitating timely payments.
Payment terms, such as due dates and accepted payment methods, should also be clearly stated on the invoice. This not only provides your clients with the necessary information to make payments, but also helps establish expectations and encourages prompt payment.
Streamlining Your Invoicing Process with Invoicing Software
While invoicing can be a tedious and time-consuming task, the process can be significantly streamlined, made faster, more accurate, and less error-prone with the use of invoicing software. Invoicing software offers a range of features that can help you create, send, and track invoices with ease, allowing you to focus on your core business activities.
In the following subsections, we’ll provide tips for choosing the right invoicing software for your UK business and discuss the key features to look for in invoicing software.
Choosing the Right Invoicing Software
The choice of the right invoicing software for your UK business is a key factor in ensuring a smooth invoicing process. Start by evaluating your business needs and identifying the features you require. For small businesses, basic invoicing features such as generating and sending invoices, tracking payments, and managing customer accounts may suffice. Larger businesses might require more sophisticated features such as automated payment reminders, multi-currency invoicing, and integration with other business systems.
Research and compare the available invoicing software options, keeping in mind factors such as cost, user-friendliness, and customer support. By considering your business requirements and the features offered by different software solutions, you can make an informed decision about which invoicing software is best suited for your needs.
Fortunately for our accounting clients they’ll get access to our own accounting software called Simplifi which makes generation and distribution of invoices super easy .
Customizing Your Invoice Template
A customized invoice template can:
- Reflect your brand identity
- Facilitate easier identification of your invoices by your clients, ensuring prompt payments
- Incorporate your company logo
- Select colors that best represent your brand
- Include your signature
By doing these things, you can create a visually appealing and professional invoice that stands out from the competition.
Subsequent subsections will cover the process of adding your company logo to your invoice template and incorporating your bank details and sort code to ensure easy payment from clients.
Adding Your Company Logo
Adding your company logo to your invoice template is an easy way to enhance its professional appearance and create a strong brand identity. Most invoicing software allows you to upload your logo, either through drag-and-drop or copy-and-paste functionality. Our invoice templates supplied in this article also have room for a logo to be added.
Incorporating your logo into your invoice template not only makes your invoices more visually appealing, but also helps clients quickly recognize and associate the invoice with your business. This, in turn, can improve the likelihood of prompt payments and contribute to a positive customer experience.
Incorporating Bank Details and Sort Code
Include your bank details and sort code on your invoice is essential for facilitating smooth and efficient payment from your clients. Bank details include the bank name, account name, account number, and sort code.
By providing this information on your invoice, you ensure that your clients have all the necessary details to make a payment, reducing the likelihood of payment delays or errors.
Remember to double-check your bank details and sort code before adding them to your invoice template to avoid any inaccuracies.
Summary
In conclusion, creating a compliant UK invoice is an essential aspect of running a successful business. By selecting the right invoice template, understanding UK VAT rules, and using invoicing software, you can streamline your invoicing process, ensuring that your invoices are accurate, professional, and easy to understand. Furthermore, customizing your invoice template with your company logo and bank details helps build a strong brand identity and facilitates timely payments from your clients.
Armed with the knowledge and tips shared in this blog post, you are now well-equipped to create, customize, and manage your invoices with confidence. Happy invoicing!
Frequently Asked Questions
How do I create an invoice template UK?
To create an invoice template in the UK, fill in your company and contact information, date and invoice number, include line items with descriptions of billable work, add tax and calculate the amount due, and download the invoice as a PDF.
Can I just make my own invoice?
Creating an invoice yourself is possible using applications like Excel or Google Sheets, and you can also use our pre-made template found at the top of this article.
To make sure your invoice looks professional and unique, consider downloading our free invoice templates and then customise them for your small business.
Does Microsoft Word have an invoice template?
Microsoft Word provides a variety of invoice templates with customizable features, so you can create professional invoices that match your business branding.
These templates can be filled out in Word and sent electronically as a PDF or printed for physical delivery. The only downside is that Word will not calculate any total amounts. You will need to calculate these yourself and update into the Word document.
How do I create a simple UK invoice?
Creating a simple invoice for the UK involves starting with a professional layout and filling in company and contact information, a unique invoice number, issue and due dates, descriptions of billable work, agreed rates, taxes, payment terms, a personal note, and your bank details.
If I were you, start with one of our templates, and go from there. Once you have set-up and created your first invoice, the rest will be much faster to create.
When is VAT registration mandatory in the UK?
VAT registration is mandatory for businesses with a VAT taxable turnover of more than £85,000. For all the details see our Comprehensive Guide to VAT Registration.