# How to create a private invoice using a template

As a private individual, writing an invoice may become necessary in many situations—whether after selling a used item or for a one-time service. In this article, you will learn step by step how to create a proper private invoice and what to consider. We’ve also included a practical Word template for download.

## What is a private invoice?

In the UK, private individuals can issue invoices in certain situations. If you sell a used personal item, provide a non-professional service, or conduct a financial transaction where the buyer requests a receipt, you may need to create a private invoice. Businesses may also request invoices when purchasing goods or services from private individuals.

However, it is important to understand when issuing an invoice might have **tax or legal consequences. HM Revenue & Customs (HMRC)** may classify your transactions as business activity rather than private sales if:

- You regularly sell items for profit.
- You buy items with the intention of reselling them.
- You make goods to sell.
- You provide services in a self-employed capacity.

If your sales are deemed a business, you may need to **[register as self-employed](https://www.ionos.co.uk/digitalguide/startup/get-started/register-as-self-employed/)** and report your income for tax purposes.

## What are the tax regulations for private invoices?

Private individuals can issue invoices, but tax obligations depend on the nature and frequency of transactions.

**Occasional private sales (non-taxable)**

- Selling used personal items for less than their original purchase price is not subject to tax.
- There is no requirement to charge [VAT](https://www.ionos.co.uk/digitalguide/startup/grow-your-business/value-added-tax-vat/) or report income if selling infrequently and not for profit.
- Examples: Selling a second-hand phone, used clothes, or old furniture.

**Selling for profit (taxable)**

- If you sell an item for more than you originally paid, you may be liable for Capital Gains Tax (CGT). This typically applies to valuable assets like antiques, art, or property.
- There is a Capital Gains Tax allowance (£6,000 for 2023/24), meaning CGT is only payable if your total gains exceed this threshold.

**Frequent sales = business**

If you regularly sell goods or services for profit, HM Revenue & Customs (HMRC) may classify you as a business, requiring:

- Self-assessment tax return filing (declaring income and expenses).
- Income tax payment on profits.
- VAT registration if your total sales exceed £90,000 per year (2024 threshold).

**Income reporting for services**

- If you provide services as a private individual (e.g., tutoring, freelancing), you must report income if it exceeds £1,000 per tax year (HMRC’s trading allowance).
- If your earnings exceed this amount, you may need to register as self-employed and file a Self-Assessment tax return.

**Online selling & HMRC reporting**

- Online platforms like eBay, Etsy, PayPal, and Vinted may report high-value transactions to HMRC.
- If you regularly sell items online for profit, you may be considered a trader, requiring tax registration.

## When should you, as a private person, issue an invoice?

If you are providing goods or services as a private individual, you can issue an invoice to another private person or even a business. There are no strict legal requirements for private invoices, but they can serve as **proof of payment** and clarify the terms of a transaction.

## What should a private invoice include?

While there are no formal rules, a well-structured invoice should contain the following:

- Your name and address (issuer)
- Buyer’s name and address (recipient)
- Invoice date and location
- Reason for the invoice (e.g., sale of goods, service rendered)
- Detailed list of goods/services provided, including date of delivery/service and quantity, description, unit price, and total price
- Total amount due
- Payment terms (e.g., ‘Due immediately’ or ‘Payable within 10 days’)
- Payment method and details (if necessary, include bank details or preferred payment method)

A polite closing, such as a greeting or a thank-you note, can add a professional touch.

Note If payment is not made in cash, it is advisable to keep a copy of the invoice for your records, especially for tax purposes.

Other details of the legal transaction can also be included on the private invoice. If, for example, a used item being sold has a known defect, it is worth noting that on the private invoice.

*‘As previously discussed, the phone’s display screen has a few small scratches on the top left’.*

### What should NOT be included on a private invoice?

- **VAT (Value-Added Tax)** – Private individuals do not charge VAT unless they are VAT-registered businesses (threshold: £90,000/year as of 2024).
- **Business details**: Do not include a business name, tax ID, or [VAT number](https://www.ionos.co.uk/digitalguide/startup/grow-your-business/vat-registration-number/) unless you are officially registered as a business.

To avoid misunderstandings, you may want to include a note such as: ‘This invoice is for a private transaction and does not include sales tax’.

## When does a private sale become a business?

Occasional private sales are not taxable in the UK, but if you regularly sell goods or services for profit, HM Revenue & Customs (HMRC) may classify you as a business, requiring you to register for tax purposes.

If you **frequently** sell items, buy goods with the intent to resell, make products to sell, or provide paid services such as tutoring or graphic design, HMRC may consider you a trader. Actively marketing your products or maintaining an online store on platforms like **eBay, Etsy, or Facebook Marketplace can also indicate business activity**.

If your total earnings from sales or services exceed £1,000 per year, you must register as self-employed with HMRC and report your income. If your total self-employment earnings exceed £12,570 per year, you must file a Self-Assessment tax return and pay Income Tax and [National Insurance](https://www.ionos.co.uk/digitalguide/startup/grow-your-business/national-insurance/). If your annual sales are more than £90,000, you must register for VAT and charge VAT on taxable goods or services.

Occasional private sales, such as selling second-hand personal items for less than their original price, are **not classified as business activity** and do not need to be reported. However, if you regularly sell for profit, you may need to register and comply with tax obligations.

Fact **Capital Gains Tax (CGT) applies if an item is sold for more than £6,000**, except for cars and personal belongings.

## Private invoice template to download

Whether using a text editor or invoicing software, issuing an invoice as a private individual is quick and easy. Make sure to include all essential details and add any necessary notes, such as a description of the invoiced item, at the end of the document. Keep a copy of the invoice—either digitally or on paper—for future reference, for example, when filing your [tax return](https://www.ionos.co.uk/digitalguide/startup/grow-your-business/self-employed-tax/).

[![Image: Alt-Text: Template for a private invoice](https://www.ionos.co.uk/digitalguide/fileadmin/_processed_/6/c/csm_private-invoice-template-uk_76dd25997d.webp "Alt-Text: Template for a private invoice")](https://www.ionos.co.uk/digitalguide/fileadmin/StartupGuide/Screenshots/private-invoice-template-uk.png) Since a private invoice doesn’t have to follow any set rules, you can design it any way you like. However, be sure to include all the content important to you. Private_invoice_template_UK.docxPlease note the [legal disclaimer](https://www.ionos.co.uk/digitalguide/startup/disclaimer/) for this article.


This is a markdown version of: [https://www.ionos.co.uk/digitalguide/startup/grow-your-business/private-invoice/](https://www.ionos.co.uk/digitalguide/startup/grow-your-business/private-invoice/) for AI/LLM consumption.