If you’re wondering whether you can invoice without a company, the answer is yes! Whether you’re an independent contractor or just starting out, invoicing without a company is possible – and it isn’t complicated.
Do I Need to Set Up a Company to Invoice?
In the UK, you don’t need to set up a company in order to invoice for your services. This is because there’s no legal requirement for businesses to have a formal company structure – sole traders can operate without one.
If you’re invoicing as an individual, you’ll just need to use your own name and address on your invoices. However, there are a few things to bear in mind if you’re going down this route.
First of all, customers may be more comfortable dealing with a registered company than an individual – so it’s worth considering whether setting up a limited company might give you an advantage in terms of winning work.
Secondly, if you’re invoicing under your own name, you’ll be personally liable for any debts incurred by the business – so it’s important to make sure you have the right insurance in place to protect yourself.
How Do I Invoice Without a Company?
There are a few different ways to invoice without a company. The simplest method is to just use your own name and address on your invoices, as we mentioned above. However, if you’d prefer to give your customers the impression that they’re dealing with a real company, there are a couple of other options available to you.
One option is to have a trading name for your business. This is basically just another name that you trade under – it can’t, however, include “limited”, “Ltd” or similar, and it must not copy another business’s registered name or trade mark. If you trade under a business name, your own name and an address where documents can be served must still appear on your invoices. There is more on the rules in our guide to running two businesses under one name, and on the tax side in do I need to register my website as a business.
What to Include in an Invoice as an Individual
If you’re invoicing as an individual, there are a few key pieces of information that you’ll need to include on your invoice.
Firstly, you’ll need to put your name and contact details (including your address, phone number and email address) at the top of the page. You should also include your customer’s name and contact details – if you’re unsure about how to format this, just take a look at some examples of invoices online.
Next, you’ll need to give your invoice a unique reference number. This is so that both you and your customer can keep track of it, and it will usually be made up of both letters and numbers. It’s a good idea to include the date that the invoice was issued, too.
Finally, you’ll need to list the products or services that have been provided, along with the corresponding cost. If there are any discounts or special offers applied, make sure to include these on the invoice as well. Once you’ve got all of this information included, just add up the total cost and put it at the bottom of the page – then your invoice will be ready to send!
Remember to put your payment details at the bottom of the invoice otherwise your client may find it hard to pay you.
Will my invoice be legally enforceable?
What is enforceable is the agreement behind the invoice, not the invoice itself. An invoice is a request for payment under a contract you already have with your customer. If they don’t pay, you can pursue the debt, including through the small claims court, whether you are a sole trader or a company.
A contract does not have to be written to be valid; an agreement made in a phone call counts. The problem is proving what was agreed. That is why it is always wise to have terms agreed in writing before you start work, even if only in an email setting out the work, the price and when payment is due. If a client later challenges an invoice, that email is your evidence.
If your customer is a business, you also have a statutory right to charge interest and a fixed compensation sum on late payment, under the late payment legislation. Stating your payment terms on every invoice makes this easier to rely on.
Can I Invoice Without A Company Number?
Yes. A company number only exists if you have a limited company, so a sole trader simply leaves it off. If you do trade through a limited company, its invoices must show the company’s registered name, and it is good practice to show the company number and registered office address too.
Do I Need To Be Registered For VAT?
You only have to register for VAT once your taxable turnover goes over the threshold, whether you are a sole trader or a company.
The VAT registration threshold rose to £90,000 in April 2024. It is worth checking the current threshold on GOV.UK before you rely on a figure, as it is reviewed at each Budget.
There is no legal requirement to register for VAT until you meet that threshold, and it applies to all businesses, including self-employed.
You may wish to register for VAT before you hit that threshold, as you do get the benefit of claiming VAT back on any purchases you make. You do, however, need to charge VAT on all invoices to customers, and your invoices then need to show your VAT registration number and the VAT charged.
If you are not registered, do not add VAT to your invoices. Some customers may ask; it is simplest to state clearly that you are not VAT registered.
Thinking beyond the first invoice
Invoicing as an individual is the right starting point for a lot of people, but the questions that follow it — whether to incorporate, when to register for VAT, how much to set aside for tax — are worth getting ahead of. Our guide to sole trader versus limited company covers the crossover point in detail.
And if the reason you are invoicing is that a business has just got going properly, it is worth putting a plan behind it. You can write one yourself with SquarePlan, or have professional business plan writers produce it for you — which is the usual route when the plan is going to a bank or a landlord rather than staying in a drawer.