The legal requirements of an invoice

If you trade in goods or supply services as a business, there are situations in which you are obliged to issue an invoice. It is not simply a request for payment — it is the document sales tax runs on. A business may only deduct VAT where the invoice it received or sent meets the legal requirements, which is why an incomplete invoice is a problem for both sides of the transaction, and why tax authorities can penalise a supplier who issues one.

So it is worth knowing what the list actually is.

The requirements, in a row

For anyone liable for VAT, an invoice has to show:

The full name of the buyer.
Your own full name — legal name or trade name — together with the address where the business is registered. A PO box number is not sufficient.
Your Chamber of Commerce number.
A unique invoice number.
The date the invoice was issued, and the date the goods or services were delivered.
A description of the goods or services supplied, including the number of units.
The VAT rate being charged.
The total VAT amount, and the amount you are charging excluding VAT.
The amount including VAT.

Anything beyond that — an introduction, a reference field, a payment link — is there to get the invoice paid faster, not to make it valid. The invoice example walks a finished document block by block if you want to see the difference between the two halves.

Digital invoicing has one extra condition

Sending invoices electronically is normal, and for many organisations it is now the only accepted form. There is one condition attached that people miss: the buyer has to accept it.

A customer may refuse an electronic invoice if they do not want to receive it in digital form. In practice this is almost never an issue, but it is a condition rather than a courtesy.

The rest is unchanged. The invoice you send digitally still has to meet the same statutory requirements, and it still has to be kept in your administration — see the retention obligation.

The reverse charge

Where the VAT is shifted to the customer, that has to be stated explicitly on the invoice. The usual way is an extra line saying the levy has been shifted — the reverse charge.

There is a second obligation that goes with it: you must include the VAT identification number of the customer on the invoice, not just your own. Both belong on the document, and one without the other is an incomplete invoice.

Invoice numbers have no gaps

Numbering is the requirement most often broken by accident. It has to be a consecutive, logical series with no holes in it. You cannot reuse a number, and you cannot skip one because a document was abandoned halfway through.

That is one of the strongest arguments for not doing this in a spreadsheet. In Invoice Office the next number in the series is assigned for you, and the format and starting number are yours to set — so a gap is not something you can create by mistake.

It is also why a sent invoice is corrected with a credit note rather than edited or deleted. Deleting it would put a hole in the series and leave your customer holding a document you no longer have.

Getting it right without thinking about it

Every invoice you create in Invoice Office carries the required fields — your company details, VAT and Chamber of Commerce numbers come from your settings, the customer block comes from the customer record, and the VAT is calculated per rate as you type. What you then change is the layout, the colours and the wording, none of which affects whether the invoice is valid.

The step-by-step version is on create an invoice.

Rules and rates are set nationally and do change. If you trade across a border, or you are unsure how a rule applies to your situation, check with your accountant or your national tax authority.