How to Invoice a Limited Company as a Freelancer UK (2026 Guide)

Invoicing a limited company in the UK is slightly different from invoicing a sole trader or individual. Limited companies are more likely to have formal procurement processes, require purchase orders, and have strict payment cycles. Here's everything you need to know.

What to Include on Your Invoice

When invoicing a limited company, your invoice must contain:

• Your name or trading name and address
• Invoice number — a unique sequential reference (e.g. INV-001)
• Invoice date
• Client's registered company name — use their full legal name (e.g. "Acme Limited", not just "Acme")
• Client's registered address — find it on Companies House
• Description of services — clear and specific (e.g. "Web development services for March 2026")
• Amount due — itemised if multiple line items
• VAT number and VAT amount (if you're VAT registered)
• Payment terms — e.g. "Net 30 days from invoice date"
• Bank details — sort code and account number, or IBAN for international payments

Should You Use the Company's Registered Address?

Yes — always use the registered company address for your invoice, not a trading address. You can find it for free on Companies House. This matters if you ever need to chase payment formally.

Do You Need a Purchase Order Number?

Many limited companies require a Purchase Order (PO) number before they'll process an invoice. Always ask your client at the start of an engagement:

"Do I need a PO number on my invoices?"

If yes, get the PO number before you submit your first invoice. Including the wrong or missing PO number is one of the most common reasons invoices are delayed.

IR35: Are You Inside or Outside?

If you're operating through your own limited company and contracting with another limited company, IR35 is relevant:

• Outside IR35: You operate like a genuine business, invoice for services, and manage your own tax
• Inside IR35: The client deducts income tax and National Insurance at source — you may receive a reduced payment

Since April 2021, medium and large private sector companies are responsible for determining IR35 status. If you're working with a large company, they should have provided you with a Status Determination Statement (SDS).

For freelancers operating as sole traders (not through a limited company), IR35 doesn't apply — you simply invoice and pay self-assessment tax.

VAT When Invoicing a Limited Company

If you're VAT registered:

• Add VAT (usually 20%) to your invoice total
• Show VAT separately as a line item
• Include your VAT registration number on the invoice
• Issue the invoice within 30 days of the service being delivered

Limited companies can usually reclaim the VAT you charge them as input tax, so being VAT registered is rarely a barrier.

If you're not VAT registered (turnover under £90,000), simply don't add VAT and don't mention it.

Payment Terms for Limited Companies

Standard payment terms for B2B invoicing in the UK:

| Term | Meaning | |------|---------| | Net 30 | Payment due 30 days from invoice date | | Net 60 | Payment due 60 days from invoice date | | 30 days EOM | Payment due 30 days after end of month |

Under the Late Payment of Commercial Debts Act 1998, you're entitled to charge 8% above the Bank of England base rate on late payments from business customers. You can also charge a fixed debt recovery fee (£40–£100 depending on the amount).

For new client relationships, Net 30 is standard. For long-term trusted clients, some freelancers accept Net 60. Avoid Net 90 unless the contract and rate justify it.

How to Chase a Late Invoice from a Limited Company

1. Email reminder — send a polite reminder 3–5 days after the due date
2. Second reminder — 10 days after the due date, be more direct
3. Formal letter — 30 days overdue, reference the Late Payment Act and state you'll add statutory interest
4. Small Claims Court — for amounts under £10,000, you can file online via Money Claim Online

Most late payments from limited companies are due to cash flow or internal process issues, not intentional non-payment. A professional chase sequence usually resolves it.

Create a Professional Invoice in Seconds

Billdrop is a free invoice generator built for UK freelancers. You can create a professional invoice with all the required fields — line items, VAT, payment terms — and download it as a PDF in under two minutes. No account needed.

Billdrop is free to use for UK freelancers. Create unlimited invoices, download as PDF, and share with clients instantly.