An invoice is the document you send a customer to request payment. This guide covers what a valid invoice must include, how it differs from a receipt, and the extra rules for VAT.
Published July 2026 · Updated July 2026
An invoice is a formal request for payment issued by a seller to a buyer. It lists the goods or services provided, the amount due, and when and how to pay. It is also the source record that feeds your sales figures.
A basic invoice should show a unique invoice number, your business name and address, the customer's details, a description of what was supplied, the date, and the amount due. If you are VAT registered, you must also show your VAT number, the rate applied, and the VAT amount, this makes it a valid VAT invoice your customer can reclaim against.
They are easy to confuse. An invoice asks for money before it is paid; a receipt is proof that payment has been received. A customer uses your invoice to arrange payment and your receipt as evidence for their own records.
Clear payment terms, a due date, and easy payment options all help you get paid faster. Good software lets you see which invoices are overdue at a glance.
A £500 design job for a VAT registered business:
Only if you are VAT registered. If you are, most invoices will show 20% VAT, though the rate depends on what you sell.
Generally at least six years for VAT and company records, though some situations require longer. Digital copies are fine.
A proforma is a draft or quote sent before the sale is confirmed. It is not a demand for payment and does not count as a VAT invoice.
Source: GOV.UK ↗. This glossary is written for small business owners, so definitions are simplified. Tax rates and thresholds reflect 2026/27 UK rules and change over time. Berified does not provide accounting, tax or legal advice; always check the source or a qualified adviser.