HMRC Invoice Requirements for Sole Traders in 2026

2 February 2026

Creating invoices might seem straightforward, but there are specific requirements that HMRC expects you to follow. Getting them wrong can cause problems during a tax inspection, make it harder to reclaim expenses, or even result in penalties if you're VAT-registered and your invoices don't meet the standard.

Whether you're a plumber, electrician, builder, decorator, or any other sole trader, here's exactly what needs to be on your invoices in 2026.

The Basics: What Every Invoice Must Include

HMRC requires that every invoice you issue contains the following information:

• A unique invoice number — Each invoice must have a number that hasn't been used before. Sequential numbering is the simplest approach (INV-001, INV-002, and so on). HMRC uses these to check your records are complete, so gaps or duplicates will raise questions.
• The invoice date — The date you issued the invoice. This is important for tax purposes, as it determines which tax period the income falls into.
• Your business name and address — Your trading name (or your own name if you trade under your personal name) and your business address. A PO Box is acceptable if that's your registered correspondence address.
• The customer's name and address — Who you're invoicing. For residential customers, a name and address is sufficient. For business customers, include their business name.
• A description of the goods or services provided — This needs to be clear enough that someone reading the invoice can understand what was supplied. "Plumbing work" is too vague. "Replacement of bathroom basin taps and associated pipework" is clear.
• The date of supply — When the goods were delivered or the service was carried out. This can differ from the invoice date and is important for determining which tax period the income falls into.
• The amount charged — The total amount due, broken down by line item where possible. If you're charging for labour and materials separately, show each on its own line.
• Payment terms — While not strictly required by HMRC, including clear payment terms (e.g., "Payment due within 14 days of invoice date") is strongly recommended. It sets expectations and protects you if there's a dispute.

Additional Requirements If You're VAT-Registered

If your business is registered for VAT, your invoices must also include:

• Your VAT registration number
• The VAT rate(s) applied to each item or group of items
• The net amount (before VAT) for each VAT rate
• The total VAT amount
• The gross total (including VAT)
• The tax point (date of supply) if different from the invoice date

For invoices under £250, you can issue a simplified VAT invoice that requires fewer details — but it's good practice to include everything regardless. It avoids any ambiguity.

If you're not VAT-registered, you must not show VAT on your invoices. Charging VAT when you're not registered is illegal and can result in serious penalties from HMRC.

What About the Reverse Charge for Construction?

If you work in the construction industry and supply CIS (Construction Industry Scheme) services to another VAT-registered business, the domestic reverse charge may apply. In this case, the invoice must state that the reverse charge applies and the customer is responsible for accounting for VAT. This is a specific requirement — if it applies to you, make sure your invoices reflect it.

Record Keeping: How Long to Keep Invoices

HMRC requires you to keep records of all invoices (both issued and received) for at least 5 years after the 31 January submission deadline for the relevant tax year. If you're VAT-registered, you need to keep VAT records for 6 years.

That means if you issued an invoice in February 2026, you'll need to keep it until at least January 2032. Digital storage is perfectly acceptable — and with Making Tax Digital on the horizon, it's actively encouraged.

Common Mistakes to Avoid

These are the invoice errors that catch sole traders out most often:

• Missing or duplicate invoice numbers. Every invoice needs a unique, sequential number. Handwritten invoices from a generic receipt book often lack proper numbering.
• Vague descriptions. "Work carried out" tells HMRC nothing. Be specific about what you did.
• No business address. Your invoice needs your trading address, not just your name.
• Showing VAT when you're not registered. This is a serious compliance issue. If you're not VAT-registered, leave VAT off completely.
• Not keeping copies. If you handwrite invoices and don't keep a carbon copy or photo, you have no record. Digital invoices solve this problem entirely.
• Inconsistent dates. The invoice date should match when you actually issued it, not when you got around to writing it up.

Penalties for Non-Compliance

If HMRC finds that your invoices don't meet requirements during an inspection, the consequences depend on the severity:

• Careless errors can lead to penalties of up to 30% of the tax due.
• Deliberate errors can attract penalties of up to 70% of the tax due, rising to 100% if the errors are also concealed.
• VAT invoice errors can result in your customers being unable to reclaim VAT, which damages business relationships.
• Missing records may lead to HMRC estimating your income — which typically won't be in your favour.

The simplest way to avoid all of this is to get your invoices right from the start.

How NippyAgent Keeps You Compliant

NippyAgent auto-generates invoices that include all the required fields: unique sequential invoice numbers, dates, your business details, customer information, clear line-item descriptions, totals, and payment terms. If you're VAT-registered, it handles VAT calculations and displays the correct breakdown.

Every invoice is stored digitally, so you always have a record. You can export your full invoice history as a CSV file for your accountant or for your own records. And because it all works through WhatsApp, you can create and send a compliant invoice in under a minute — even while you're still on the job.

No templates to fill in, no formatting to worry about, no missing fields. Just tell NippyAgent the details and it handles the rest.