How to Create a VAT Invoice in the UK (Guide for Sole Traders)

If you’re a tradesman or sole trader in the UK who’s VAT-registered — or approaching the VAT threshold — you need to understand what a valid VAT invoice looks like and how to create one correctly.

Get it wrong and your customers can’t reclaim their VAT. Get it right and invoicing becomes a competitive advantage.

Do you need to charge VAT?

You must register for VAT if your VAT-taxable turnover exceeds £90,000 in any 12-month rolling period (the current 2024/25 threshold).

You can voluntarily register below this threshold. Some tradespeople do this to appear more credible to business customers who want to reclaim VAT.

If you’re below the threshold and not voluntarily registered: you do not charge VAT. Your invoices should say “VAT not applicable — not VAT registered” if customers ask.

What must a VAT invoice include?

HMRC requires the following on a valid VAT invoice:

The word “Invoice” — clearly stated
A unique sequential invoice number
Your business name and address
Your VAT registration number
The invoice date
The tax point (date of supply) — usually the same as the invoice date for most work
Customer name and address
Description of goods or services
Quantity and unit price for each item
Total excluding VAT
VAT rate applied (usually 20% standard rate, 5% reduced, or 0% zero-rated)
Total VAT amount
Total including VAT

Missing any of these means the invoice is technically invalid, and your customer can’t use it to reclaim VAT.

Simplified VAT invoices

For transactions under £250 (including VAT), you can issue a simplified VAT invoice. It doesn’t need the customer’s name and address, and doesn’t need to show the net amount — just the gross amount and the rate of VAT included.

Most tradesman invoices are over £250, so full VAT invoices are the norm.

VAT rates in the UK

Standard rate: 20% — applies to most goods and services (most trade work)
Reduced rate: 5% — applies to some energy-saving work, home renovation for disabled people, and some residential conversions
Zero rate: 0% — applies to new house builds and some renovation work

When in doubt, 20% applies. If you’re doing renovation or energy work, check HMRC’s guidance as reduced rate rules are detailed.

How to create a VAT invoice on your phone

Creating a proper VAT invoice doesn’t require a desktop or accounting software. With Spanner:

Set your VAT number in Account → Business Details — it appears on every invoice automatically
Create a new invoice — add customer, line items, and description
Enable VAT — Spanner calculates 20% VAT automatically and shows the breakdown
Review the invoice — net amount, VAT amount, and gross total are clearly displayed
Share — send via email or download as a PDF that meets HMRC requirements

The PDF includes all required VAT fields, your VAT number, sequential invoice number, and the correct breakdown.

Common VAT invoicing mistakes UK tradespeople make

Not including a VAT number: If you’re VAT-registered and forget your VAT number, the invoice isn’t valid. Set it in your app once and it auto-fills.

Using a pro-forma invoice instead of a VAT invoice: A pro-forma is a draft document — it has no legal status. If a customer asks for a VAT invoice, they need the real one with your VAT number.

Wrong tax point date: For most trade work, the tax point is when the service is completed, not when the invoice is issued. If there’s a gap, make sure the tax point date is correct.

Charging VAT before you’re registered: You cannot legally charge VAT before your registration is confirmed by HMRC. If you’re approaching the threshold, apply early.

VAT for CIS (Construction Industry Scheme) workers

If you work in construction and are registered under CIS, the reverse charge VAT rules may apply to your invoices when working B2B. Under domestic reverse charge:

You do not charge VAT on your invoice
Instead, your customer (the main contractor) accounts for the VAT
Your invoice should state “Reverse charge: customer to account for VAT to HMRC”

This applies to most building and construction services supplied to VAT-registered businesses. It does not apply to invoices to end consumers (homeowners).

Keeping VAT records

HMRC requires you to keep VAT records for at least 6 years. Records include:

Copies of all VAT invoices issued
VAT account (a record of VAT charged and reclaimed)
VAT returns submitted

If you use Spanner, every invoice you create is stored in your account with all details intact. You can export them for your accountant or VAT return.

Frequently asked questions

What is the current VAT registration threshold in the UK? £90,000 in any rolling 12-month period (as of 2024/25).

Does a sole trader need to be VAT-registered? Only if your turnover exceeds £90,000, or if you choose to register voluntarily.

What happens if I send an invoice without a VAT number? It’s technically invalid for VAT purposes. Your customer can’t reclaim the VAT, and HMRC may dispute it. Always include your VAT number.

Can I use a simple app to create HMRC-compliant VAT invoices? Yes. Spanner creates VAT invoices with all required fields — VAT number, sequential invoice number, net/VAT/gross breakdown — compliant with HMRC requirements.

See Spanner’s UK invoicing features or download free to start creating VAT invoices from your phone.