How to write a receipt of payment (with template)

Using the right receipt template makes filling out a receipt in­cred­ibly simple. But what does a receipt template actually include? And why are receipts necessary at all? We’ll guide you through the process of issuing a receipt and highlight the essential details you must include.

What is a receipt of payment?

A receipt of payment is a document that ac­know­ledges payment for a product or service. It typically includes details such as the date and time of purchase, items purchased, total amount paid, payment method, and business details (such as name and location). If the purchase was made in a physical store rather than online, the store’s address is usually included.

In the United Kingdom, there are no legal re­quire­ments for busi­nesses to issue receipts for standard trans­ac­tions, except in certain cases such as VAT invoices for VAT-re­gistered busi­nesses. However, receipts must be accurate and should include key details for tax and record-keeping purposes.

For card payments, busi­nesses must comply with the Payment Card Industry Data Security Standard (PCI DSS), which regulates how card details are stored and displayed. Only the last few digits of a credit/debit card may be shown on a receipt, and ex­pir­a­tion dates must not be printed.

What is the purpose of receipts of payment?

Receipts serve several important purposes for both busi­nesses and consumers. They act as proof of payment and provide a record of trans­ac­tions for financial, legal, and tax-related reasons.

1. Proof of purchase – Confirms trans­ac­tions for returns, war­ranties, and disputes.
2. Legal & tax doc­u­ment­a­tion – Important for business records, VAT reporting (if ap­plic­able), and tax de­duc­tions for self-employed in­di­vidu­als and busi­nesses.
3. Expense tracking – Helps in­di­vidu­als and busi­nesses manage budgets and claim business expenses.
4. Fraud pre­ven­tion – Verifies trans­ac­tions and helps consumers dispute un­au­thor­ised charges.
5. Reg­u­lat­ory com­pli­ance – Busi­nesses must comply with UK tax laws, including issuing VAT receipts if VAT-re­gistered.

What is the dif­fer­ence between a receipt of payment and an invoice?

An invoice is a request for payment issued by a seller to a buyer. It typically includes:

• Products or services provided
• Prices, VAT (if ap­plic­able), discounts, and total amount due
• Payment terms (e.g., due in 30 days or upon receipt)
• Business contact details (e.g., address, phone, website)

Invoices are commonly used in business-to-business (B2B) trans­ac­tions or for services rendered before payment is received.

A receipt of payment, on the other hand, confirms that payment has been made and that a sale is complete. It serves as:

• Proof of purchase for returns, exchanges, or war­ranties
• A record of what was bought, how much was paid, and the payment method
• A document that includes business details but usually limited customer in­form­a­tion

Receipts are most common in business-to-consumer (B2C) trans­ac­tions and for immediate payments.

How to fill out a receipt of payment correctly

A receipt of payment should typically include the following:

✓ Title: ‘Receipt’ (optional but re­com­men­ded)

✓ Trans­ac­tion date and time

✓ Receipt number (for tracking, but not legally required)

✓ Business name and address

✓ Items purchased or services provided (with de­scrip­tion and quantity)

✓ Price per item and total amount paid

✓ VAT amount and VAT rate (if ap­plic­able, for VAT-re­gistered busi­nesses)

✓ Total including VAT (if ap­plic­able)

✓ Payment method (cash, card, etc.)

✓ Merchant contact in­form­a­tion (phone, email, or website)

Extra points to consider for com­pli­ance

• VAT con­sid­er­a­tions: If a business is VAT-re­gistered, the receipt should include a VAT breakdown. If the trans­ac­tion is zero-rated or VAT-exempt, this should be stated.
• Legal re­quire­ments: A receipt is not legally required unless a VAT invoice is needed, but busi­nesses commonly issue receipts as proof of purchase.
• Card payment security: Busi­nesses must comply with PCI DSS (Payment Card Industry Data Security Standard) rules—receipts should only show the last 4 digits of a card number and never include the ex­pir­a­tion date.
• Keep records: Busi­nesses must retain receipts for six years as part of their financial records.

You can issue a receipt of payment either elec­tron­ic­ally or on paper. It can be created by hand using a receipt book or generated using a digital receipt template on your computer. However, HMRC requires that records be kept digitally for VAT-re­gistered busi­nesses under Making Tax Digital (MTD).

Using ac­count­ing software can stream­line this process by in­teg­rat­ing receipt creation with your overall book­keep­ing. This helps to automate data entry, saving time and reducing errors. If your business issues a high volume of receipts, switching to a digital solution may be more efficient.

If you don’t have ac­count­ing software or prefer physical copies, you can use a receipt book, which usually includes duplicate pages (one for the customer and one for your records). Al­tern­at­ively, pre-made receipt templates can be down­loaded and printed for manual use.

Receipt template to download

This is an example of how a receipt of payment looks:

Please note the legal dis­claim­er for this article.