Invoice requirements

The body in the United Kingdom that can best inform you about invoice requirements is the HMRC. HMRC stands for ‘HM Revenue and Customs’. It is the tax authority of the UK government. The minimum requirements, according to the HMRC, are an invoice that meets the following requirements:

  • A unique identification number.
  • Your company name, address, and contact information.
  • The company name and address of the customer you’re invoicing.
  • A clear description of what you’re charging for.
  • The date the goods or service were provided (supply date).
  • The date of the invoice.
  • The amount(s) being charged.
  • VAT amount if applicable.
  • The total amount owed.

To whom do you send the invoice

It is smart to always send the invoice to the person within the organization who is responsible for payments. Always ask for contact details before entering into a business relationship with your customer. A simple question like “To which e-mail address or address can I send the invoice?” can answer this for you. Also, always ask for the legal name the invoice should be sent to. This is a mistake often made when sending invoices.

It is advisable to build a good relationship with the contact who pays your invoices. This is the first step to good debtor management. This way, you can easily reach out when something goes wrong with a payment.

The invoice number

One of the requirements is an invoice number. The invoice number is a unique number that may be given once per invoice. You can choose to give one starting with a year followed by an ascending number sequence. It is not allowed to skip numbers in the sequence. This would mean that one of the invoices is lost.

Invoicing according to the law

The law also lists the invoice requirements. If you do not comply with the invoice requirements, you are breaking the law. However, according to HMRC, a person will not be liable to a penalty if they have a reasonable excuse for the non-deliberate unauthorized issue of the invoice. Any regulatory penalty will apply to the general failure and will not attach to each invoice issued.

For the customer, it is annoying to receive an incorrect invoice. This is because it cannot deduct the sales tax charged if the invoice is incorrect. In most cases, the buyer will therefore reject the invoice, resulting in an unpaid invoice. Therefore, always send a correct invoice after if one of your buyers has discovered an error in your invoice requirements.

An error in the invoice

Have you made an error in the invoice? Then it is no longer possible to change it. This is because you must always provide a unique invoice. If you make a change and send it again, two identical invoice numbers will circulate with different content. This is not allowed by the tax authorities.

You can credit the invoice and then send a new invoice to undo the error.

Government invoice requirements

You want to send an invoice to the government. If so, a government agency may ask you for an e-invoice. With an e-invoice, the content of the invoice is changed to a digital format. The invoice requirements are the same for an e-invoice as for a paper invoice.

A compliant invoice gets paid faster. For you as a business owner, properly managing outstanding invoices can be quite a chore. Do you want to save time? Then choose to outsource your accounts receivable management to Payt.

At Payt, we ensure that you get your invoices paid faster and easier with the most complete software in the field of debtor management.

Sander Kamstra
Written by Sander Kamstra LinkedIn profile
Sander Kamstra is director and one of the founders of Payt. He is an entrepreneur in heart and soul. He likes to work with people who are just as driven as he is to achieve success by setting the right priorities and making smart choices.

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