How to create an invoice for your limited company – includes template

If you decide to trade as a limited company contractor, every time you complete a payment period (typically weekly or monthly), you will have to submit an invoice to your agency or client before payment can be made.

Scroll down for a downloadable Word template.

Given that bad cash-flow management is the biggest cause of failure for UK firms, it is important that you format your invoices correctly. Otherwise, you could suffer delays before payment is released.

To comply with the law, you must ensure that you supply certain information on your invoices. There are additional rules if you are VAT registered (as most contractors are). We have included all the mandatory fields below.

How should you create your invoices in 2026?

Most limited company contractors now use online accounting software to create and send their invoices.

All major accounting software platforms let you create professional invoices, add VAT automatically, track payments, and send reminders when invoices become overdue.

We’ve used FreeAgent at IT Contracting for many years. It is a massive time-saver, and as soon as you create an invoice, your accounts update accordingly.

Xero is another popular option, particularly for businesses with more complex needs than the typical one or two-man band.

Most contractor accountants provide accounting software as part of their monthly fee – almost always FreeAgent, unless they use a bespoke platform.

You can also read our guide to limited company accounting software for more information.

What details must you include on invoices?

All limited company invoices must include the following information:

• A unique identifying invoice number.
• Your full limited company name, as shown on your certificate of incorporation.
• Your company address and contact details.
• The name and address of the recruitment agency or client.
• A clear description of what you are invoicing for, e.g. IT services – 35 hours (units) at £40 per hour.
• The date the invoice was issued.
• The date the services were supplied, if different from the invoice date.
• The amount charged, the VAT amount (if applicable) and the total amount owed.

If you are VAT registered, your invoices must also include:

• Your company’s VAT registration number.
• A sequential, unique invoice number.
• The VAT tax point, where different from the invoice date.
• The rate of VAT used (the standard rate is 20% for most contractor services).
• The quantity or extent of the services supplied, the unit price and the amount payable excluding VAT.
• The total amount charged, net and gross of VAT, showing the VAT amount separately.

You should also include the following details to help ensure prompt payment:

• The word ‘Invoice’ clearly displayed at the top.
• Your company’s registered number (on your certificate of incorporation).
• Any reference number supplied by the agency or client (such as a PO number).
• Any pre-agreed expenses (including the VAT element). Keep this element separate from your contract work details.
• How you would like the funds to be transmitted to your company bank account (see below).
• Your payment terms (see below).

Other details

To minimise the chances of late or non-payment, you should also include your company’s bank account sort code and account number.

If no payment terms are specified, the law generally assumes a standard 30-day payment period.

However, most agencies and clients pay faster than this. Find out what the standard payment terms are before you start your contract, and specify the period on your invoices (7 days, 14 days, etc.).

All VAT invoices must be issued with a sequential, unique number, which also makes your accounting much simpler.

For example, if you are working for the agency Computer Personnel Ltd, your first invoice number could be CP001, the next CP002, etc.

Don’t forget to enclose your signed timesheet with your invoice (assuming the procedure is in place to email or upload them at the same time).

Some agencies operate self-billing arrangements, where they generate invoices on your behalf. If this applies to your contract, check the arrangements with your agency and accountant.

When you’re dealing with an agency or client for the first time, we also recommend taking down the accounts department’s details (ideally a specific contact), in case there are teething problems.

If your invoice isn’t paid on time, try our dedicated article on tackling late payment problems.

VAT invoice template

If you’d rather create your invoices manually, you can download a sample limited company VAT invoice here:

• MS Word (.docx)

For occasional invoicing, a Word template may be all you need. However, if you invoice regularly, accounting software will usually save you time and make it easier to keep your records up to date.

If you’re not supplying professional services (i.e. where you charge by the hour/day), simply change the columns to suit the type of product or service you provide to customers/clients.

Further resources

Visit the GOV site for details on what a VAT invoice must include, by law.