Issuing accurate and compliant limited company invoices is essential for contractors and freelancers operating through UK limited companies. A properly structured invoice not only helps you get paid promptly but also ensures you meet HMRC and VAT invoice requirements, reducing the risk of errors, disputes, or penalties.
In this in-depth guide, Nexus Accounting explains exactly what an invoice is, what it should include, and what a professional limited company invoice looks like in the UK. Whether you invoice monthly, per project, or per milestone, getting the details right is critical for financial control and compliance nationwide.
Let’s break down the essential elements every limited company invoice should include.
Table of Contents:
- What Is an Invoice and Why It Matters for Limited Companies
- Your Limited Company’s Legal Name and Address
- A Unique Invoice Number
- Invoice Date and Tax Point
- Client Details and Billing Information
- Clear Description of Services Supplied
- Net Amount Charged
- VAT Information and VAT Invoice Requirements
- Total Amount Payable
- Payment Terms and Bank Details
What Is an Invoice and Why It Matters for Limited Companies
An invoice is a formal financial document issued by your limited company requesting payment from a client for services provided. For UK contractors and freelancers operating via limited companies, invoices are a fundamental part of your company’s accounting records.
Invoices are important because they:
- Provide legal evidence of income
- Support accurate bookkeeping and VAT reporting
- Help manage cash flow and payment timelines
- Protect your company during HMRC reviews or inspections
From an accounting perspective, a compliant invoice ensures income is recognised correctly and aligns with HMRC record-keeping standards. Nexus Accounting regularly supports limited company clients with invoice reviews and systems as part of its specialist contractor accounting services.
Your Limited Company’s Legal Name and Address
Your invoice must clearly display your limited company’s registered legal name, exactly as it appears on Companies House records. If your company uses a trading name, this can be shown alongside the legal name, but it should never replace it.
Using the correct legal name confirms your company’s identity and ensures the invoice is legally valid.
Which address should be included?
Your limited company’s registered office address should be shown on every invoice. This helps clients verify your business and ensures compliance with UK company law.
Incorrect or incomplete company details are a common cause of delayed payments and avoidable disputes.
A Unique Invoice Number
An invoice number is a unique reference assigned to each invoice issued by your limited company. It allows both you and your client to track payments and reconcile records accurately.
Best practices for invoice numbering
To stay organised and compliant:
- Use sequential invoice numbers
- Avoid duplicates or gaps
- Keep numbering formats consistent
HMRC expects invoices, particularly VAT invoices, to be traceable and clearly ordered.
Invoice Date and Tax Point
The invoice date shows when the invoice was issued and determines when the income should be recorded in your company accounts, making it a key detail for accurate financial reporting.
Closely linked to this is the tax point, which is the date VAT becomes due and is often the same as the invoice date. Clearly stating the tax point is essential for accurate VAT reporting, helps avoid confusion for clients, and ensures that VAT returns align correctly with your accounting periods, particularly for contractors who invoice on a regular basis.
Client Details and Billing Information
A professional limited company invoice should include accurate client details such as:
- Client’s business name
- Client’s registered address
- Purchase order number (if provided by the client)
Accurate client details reduce delays, prevent disputes, and help your invoice move smoothly through internal payment approval processes.
Clear Description of Services Supplied
Your invoice must clearly describe the services your limited company has provided. Vague descriptions can result in delayed payments or additional questions from both clients and HMRC.
Examples of effective service descriptions include:
- “IT consultancy services – June 2025”
- “Software development services – Project Alpha milestone 2”
Clear descriptions strengthen your audit trail and support contractual clarity.
Net Amount Charged
The net amount charged is the total fee before VAT and should be clearly stated on the invoice so clients can easily understand exactly what they are being charged for. Where your limited company invoices for multiple services or deliverables, itemising each charge separately with its corresponding cost improves transparency, supports clearer communication, and reflects a professional invoicing approach.
VAT Information and VAT Invoice Requirements
If your limited company is VAT-registered, your invoices must meet UK VAT invoice requirements. Failure to include the correct information can invalidate VAT claims and lead to HMRC penalties.
What VAT details must be included?
A VAT-compliant invoice must clearly show:
- Your VAT registration number
- The VAT rate applied (e.g. 20%)
- The VAT amount charged
- Net, VAT, and gross totals
What a VAT invoice looks like
A compliant VAT invoice clearly separates net amounts from VAT and total payable figures. Nexus Accounting frequently helps contractors ensure their VAT invoices are structured correctly to avoid errors and delays.
Total Amount Payable
The total amount payable is the final figure your client must pay, including VAT where applicable, and it should be clearly visible and easy to identify on the invoice. Clearly highlighting this amount reduces confusion, helps clients process payments more quickly, and ultimately improves your limited company’s cash flow.
Payment Terms and Bank Details
Payment terms explain when payment is due. Common examples include:
- Payment due within 14 days
- Payment due within 30 days
Clear terms set expectations and reduce late payments.
Bank details to include
Your limited company invoice should include:
- Account name
- Sort code
- Account number
Accurate bank details ensure payments are made quickly and without errors.
Key Takeaways for Contractor National Insurance
- Limited company invoices must include accurate legal and company details
- Each invoice should have a unique reference number
- Clear service descriptions help avoid disputes
- VAT-registered companies must follow strict VAT invoice requirements
- Professional invoices support faster payments and HMRC compliance
FAQs
How do you write a limited company invoice?
To write a limited company invoice, you should include your company’s registered name and address, a unique invoice number, the invoice date and tax point, clear details of the services provided, the net amount charged, VAT details if applicable, the total amount payable, and your payment terms and bank details. Presenting this information clearly and consistently helps ensure compliance, professionalism, and timely payment.
What is required on a VAT invoice?
A VAT invoice must include your limited company’s VAT registration number, the invoice date and tax point, a description of the goods or services supplied, the net amount charged, the VAT rate applied, the VAT amount, and the total amount payable including VAT. These details are required by HMRC to ensure VAT is calculated and reported correctly.
What does an invoice look like for a UK limited company?
A UK limited company invoice clearly shows company details, a unique invoice number, service descriptions, net amounts, VAT where applicable, and the total amount payable. It should be professionally laid out, well structured, and easy for clients to understand and process for payment.
Simplify Your Limited Company Invoicing with Nexus Accounting
Getting limited company invoices right is a vital part of running a compliant and profitable business. By including the correct information and following HMRC guidance, you reduce risk, improve cash flow, and maintain professional credibility.
Nexus Accounting specialises exclusively in accounting for contractors and freelancers operating through limited companies. If you want expert support with invoicing, VAT, or ongoing compliance, explore our limited company accounting services or contact Nexus Accounting today for tailored advice.
