VAT, Payment Terms and Late Payment Wording

Quick answer

Use short, clear payment terms. Show VAT only if your business is VAT registered. Add bank details and a payment reference so the customer can pay without chasing you for information.

Payment terms examples

Your payment terms should be easy to understand. Avoid vague wording like "pay soon" or "payment on receipt" if you actually want payment within a set number of days.

Payment due within 7 days of invoice date.
Payment due within 14 days. Please use the invoice number as the payment reference.
Payment by bank transfer to the account details shown below.

VAT wording

If you are VAT registered, include your VAT number and show the VAT amount clearly. If you are not VAT registered, do not add VAT to the invoice. SayInvoice lets you save a default VAT rate, then override it for a specific job if needed.

Example wording VAT charged at 20%. VAT number: 123 4567 89.

Late payment notes

A late payment note does not need to sound aggressive. The goal is to make the expectation clear before payment becomes overdue.

Example: Please pay this invoice within 14 days. Late payment may incur statutory interest and recovery costs where applicable.

Choosing the right payment terms

Shorter terms are common for call-outs, repairs, and small jobs. Longer terms might make sense for bigger business customers, landlords, or agreed commercial work. The important thing is to choose terms you are prepared to follow up on.

7 days works well for many small trade invoices.
14 days can feel reasonable for repeat customers and larger invoices.
Payment on completion can work for simple jobs, but the invoice should still show a due date.
Deposits should explain what the upfront payment covers.

Bank details and payment references

Make payment easy. Include the account name, sort code, account number, and a reference instruction. If the customer pays with the invoice number as the reference, it is much easier to match the payment later.

Example wording Please pay by bank transfer using invoice SI-104 as the payment reference.

How to chase politely

Chasing payment is easier when your original invoice was clear. Your first reminder can be polite and practical, because the due date, total, and reference are already on the invoice.

Before due date: send the invoice promptly and make payment instructions clear.
On due date: a short reminder is usually enough for good customers.
After due date: refer back to the invoice number, amount, and due date.
For repeat problems: tighten your terms, ask for deposits, or pause further work until payment clears.

VAT mistakes that slow payment down

VAT confusion can create unnecessary questions. If you charge VAT, show the VAT amount and your VAT number. If you do not charge VAT, keep the invoice simple and do not add a VAT line. Customers should be able to understand the total without guessing.

If your VAT situation changes, update your saved invoice settings before creating new documents.

Frequently asked questions

Should I put late payment wording on every invoice?

Many businesses do. It sets the expectation early and avoids a surprise if payment becomes overdue. Keep the wording calm and professional.

Can I use different terms for different customers?

Yes. You might use 7 days for domestic jobs and 14 or 30 days for certain commercial customers. The invoice should always show the actual terms for that job.

Do I need to mention VAT if I am not VAT registered?

Do not charge VAT if you are not VAT registered. If customers regularly ask, you can add a simple note explaining that VAT is not charged.

How SayInvoice helps

Store your payment terms, bank details, VAT preference, and standard notes once. Every time you create a quote or invoice, SayInvoice can include them automatically on the PDF.

Set up invoice terms Sole trader invoice checklist

VAT, payment terms and late payment wording for UK invoices