Invoicing without
a VAT number

If you are not VAT registered, invoicing is simpler, not second class. Your invoices are valid without a VAT number, and the price you charge is simply the price. The main job is making sure nothing on the invoice suggests otherwise.

What your invoice shows

Everything a UK invoice needs, minus the VAT: a unique invoice number, your name and address, any business name and an address for legal documents if you use one, the customer's name and address, a description, the supply date, the invoice date, the amounts and the total. The guide on what a UK invoice must include has the checklist.

What it must not show

Do not add a VAT line, a VAT rate, a VAT total or a VAT number. Do not describe the total as "including VAT". An invoice that looks like a VAT invoice when you are not registered misleads the customer, who might try to reclaim VAT that was never charged.

Many sole traders add one line, such as "Not registered for VAT", near the total. It is not required, but it answers the question a customer's accounts team would otherwise ask.

Your prices

Without VAT, your price and your invoice total are the same number, which is simpler for customers who cannot reclaim VAT, such as households. If you quote to businesses, say your prices are not subject to VAT so there is no confusion when the invoice arrives.

Customers who ask for your VAT number

Some customers' systems ask for a VAT number for every supplier. Tell them you are not VAT registered; they record you as a non-VAT supplier and pay the invoice total. There is no VAT for them to reclaim, and nothing to add.

Keeping an eye on the threshold

You must register for VAT when your VAT taxable turnover goes over £90,000 in any rolling 12-month period, not just the tax year, or when you expect it to exceed the threshold in the next 30 days alone. Check the rolling total every month as you approach it. The VAT registration calculator shows how close you are and compares the schemes you could use.

Registering voluntarily

You can register below the threshold. It can make sense if most of your customers are VAT registered, because they reclaim the VAT you charge, and you can reclaim VAT on your own business costs. It also brings VAT returns and records under Making Tax Digital for VAT, and, from April 2029, e-invoicing for your VAT invoices. The guide do I charge VAT on my invoice sets out the trade-offs.

When you register

From your effective date of registration, you must charge VAT on taxable supplies and give VAT invoices to VAT-registered customers. Invoices dated before that date stay without VAT. Plan the switch: tell regular customers that your prices will have VAT added from a given date, update your invoice template with your VAT number, and check your numbering continues without a break.

If registration is backdated because you registered late, you may owe VAT on sales you already made without charging it. That is a strong reason to watch the threshold closely.

Construction work and CIS

If you work in construction and are not VAT registered, the domestic reverse charge does not affect you: you charge no VAT, so there is nothing to reverse. CIS deductions still apply to the labour part of your invoice when a contractor pays you under the scheme.

A quick example

A self-employed dog walker with a turnover of £28,000 invoices a client £320 for a month of walks. The invoice shows the walks, the £320 total and a note that the walker is not VAT registered. There is no VAT line, and the client pays £320.

Registered and unregistered invoices compared

Why unregistered can be an advantage

For businesses selling mainly to households, not being registered keeps prices lower than a registered competitor's for the same work, because households cannot reclaim VAT. A plasterer charging £1,000 for a job without VAT is competing with a registered firm that must charge £1,200 for the same price before VAT. That advantage narrows as turnover approaches the threshold, which is why many sole traders watch it closely.

For businesses selling mainly to VAT-registered companies, the picture is reversed: the customer reclaims the VAT anyway, so registering costs them nothing, and you can reclaim VAT on your own costs. The VAT registration calculator compares your position under each scheme.

Getting close to the threshold

Check your rolling 12-month turnover at the end of every month. When it passes £90,000, you have 30 days from the end of that month to register, and your registration takes effect from the first day of the second month after. Plan the change:

1. Decide how your prices will change for household customers.
2. Tell regular customers, with the date VAT will start.
3. Choose Making Tax Digital compatible software for VAT returns.
4. Update your invoice template with your VAT number and VAT lines.
5. Check whether construction work now falls under the reverse charge, using the reverse charge checker.

Mistakes to avoid

Charging VAT while you wait for your number. You cannot show VAT on an invoice until you have your VAT number. While you wait, you can increase your prices to cover the VAT you will owe from your effective date, then reissue those invoices as proper VAT invoices once the number arrives, so registered customers can reclaim the VAT.

Showing a VAT number you do not have. It misleads customers, who may try to reclaim VAT that was never paid to HMRC.

Forgetting the rolling test. The threshold is not checked once a year at tax return time. A good autumn can take you over in any month.

When you are not registered but your supplier is

Being unregistered also affects what you buy. When a VAT-registered supplier invoices you, the VAT on their invoice is a cost to you, because you cannot reclaim it. Record the full amount, VAT included, as your expense. Keep the invoice all the same: it is still evidence of a business cost for your tax return, and if you later register, some VAT on goods you still hold and certain recent services may be reclaimable, subject to HMRC's time limits.

How your records look without VAT

Your records are simpler: sales at the invoice total, expenses at what you paid including any VAT. You still keep every invoice and receipt for at least 5 years after the 31 January filing deadline for the tax year; see how long to keep invoices. Your invoices need all the standard details in what a UK invoice must include, and a clear numbering format from the invoice number generator. If you work in construction, CIS deductions still apply to your labour, as the CIS invoice requirements guide explains.

Common questions

Can I register for VAT just to look more established? You can register voluntarily, but it brings VAT returns, records and, from April 2029, e-invoicing. Do it for the numbers, not the image.

My customer's system will not accept an invoice without a VAT number. Ask them to set you up as a non-VAT supplier; it is a routine option in accounting systems.

Do I need to tell customers I am not registered? Not by law. A short note on the invoice avoids questions, and saying it in your quotes too means nobody is surprised by a total with no VAT line.

Does being unregistered affect Making Tax Digital for Income Tax? No. MTD for Income Tax depends on your qualifying income, not VAT. You can be in MTD for Income Tax and not VAT registered.

Related reading

For the full decision on whether VAT belongs on an invoice, start with do I charge VAT on my invoice. For the day-to-day of invoicing on your own, see how to invoice as a sole trader and how to invoice as a freelancer. And for the definition of a VAT invoice, the kind you will issue once registered, see VAT invoice. Being unregistered is not a lesser way to run a business; for many sole traders it is the right one, as long as the invoices say so clearly and the threshold is watched every month.