Contractor invoice template
"Contractor" covers two different jobs, and this template serves both. If you contract by the day through your own company, it bills timesheets, milestones and retainers against a purchase order. If you are a main contractor in construction, you are the one making CIS deductions rather than receiving them — and that changes what you have to issue.
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Invoice details
Your business
Adds your VAT number below, plus VAT columns and a VAT section.
Stored on your device only and embedded in the PDF. PNG or JPG, under 1MB.
Bill to (your client)
VAT
CIS (construction)
Domestic reverse charge
Appearance
Items
Discount, deposit & payment
Receiving a deposit can create a VAT tax point. Check HMRC guidance if unsure.
Your business name
Invoice
INV-0001
Bill to
Client name
- Invoice date
- 01/10/2026
| Description | Qty | Unit | VAT | Net |
|---|---|---|---|---|
| — | 1 | £0.00 | 20% | £0.00 |
- Net total
- £0.00
- VAT 20%
- £0.00
- Total VAT
- £0.00
- Total
- £0.00
Day rates, timesheets and milestones
Day-rate contracting invoices are usually checked against something: an approved timesheet, a signed-off milestone, or a monthly retainer period. Make the match easy. State the period the invoice covers, the number of days and the rate — "Development, 1–19 September: 15 days @ £475" — and quote the purchase order number prominently, because a corporate accounts payable system will bounce an invoice without one before a human ever reads it.
If you're engaged through an agency, the agency is your customer, not the end client: bill the agency's legal entity, use their reference, and follow their submission route, which is often a portal rather than email. Half-days and overtime should be separate lines at their own rates rather than fractions buried in the main one.
Off-payroll working can reduce what lands in your account
If you contract through your own limited company, check who decides your IR35 status. For public sector clients and medium or large private sector clients, the client makes the determination; where the engagement is inside the off-payroll rules, the fee-payer deducts income tax and National Insurance before paying your company's invoice. The invoice total doesn't change — the amount that arrives does, much like a CIS deduction.
Small private sector clients are the exception: responsibility for the status decision stays with your company. Either way, bill the full contract value and record the deduction separately when it's made rather than invoicing net. HMRC's off-payroll working guidance sets out who decides what.
Construction: as a contractor you deduct, you don’t get deducted
Construction main contractors have obligations that subcontractors don't. Before paying a new subcontractor you must verify them with HMRC, which tells you whether to deduct at 20% (registered and verified), 30% (not registered or not verifiable) or 0% (gross payment status). You then file a monthly CIS return and give every subcontractor a payment and deduction statement within 14 days of the tax month end. The deduction always comes off labour only — never materials, never VAT.
You also become a deemed contractor if your business isn't in construction but has spent more than £3 million on construction work in the last 12 months. GOV.UK covers what you must do as a CIS contractor. Invoicing a contractor rather than paying one? The CIS invoice generator applies the deduction for you.
Where the reverse charge leaves you
If you're VAT registered and buying in construction services from other VAT-registered subcontractors, most of those invoices arrive under the domestic reverse charge: the subcontractor shows VAT but doesn't charge it, and you account for it to HMRC on your own return. When you then bill the client at the top of the chain, the charge stops if they're an end user — but they have to tell you so in writing. Without that confirmation, treat the supply as reverse-charged. The CIS and reverse charge guide has the wording.
A typical contractor invoice
Example line items you might add:
- Development, 1–19 Sept — 15 days @ £475 (PO 44102)
- Milestone 2: integration delivered — £2,000
- Monthly retainer — September
Frequently asked questions
What does a main contractor have to do under CIS?
Verify each subcontractor with HMRC before the first payment, deduct at the rate HMRC returns (20%, 30% or 0%), file a monthly CIS return, and issue each subcontractor a payment and deduction statement within 14 days of the end of the tax month.
Does IR35 change how I write my invoice?
Not the invoice itself — you still bill the agreed contract value. What changes is the payment: where an engagement is inside the off-payroll rules, the fee-payer deducts income tax and National Insurance before paying your company, so the receipt is less than the invoice total.
Should I invoice the agency or the end client?
The agency, if that is who you contracted with. Bill their legal entity, quote their reference or PO number, and submit it however their process requires — many use a portal rather than accepting emailed PDFs.
Why does my client say the reverse charge does not apply to them?
They are probably claiming end user status — the final customer who is not making an onward supply of construction services. That claim only removes the reverse charge if they confirm it to you in writing; without written confirmation, apply the charge.
Do contractors charge VAT on invoices?
Only if VAT registered. Many contractors register voluntarily because their clients are businesses that reclaim it anyway, and registration becomes compulsory above £90,000 of taxable turnover in a rolling 12 months.