The agreement comes first
Before a self-billed invoice can be raised for a worker or an umbrella company, a self-billing agreement has to exist for them, and it has to be live. The product refuses otherwise, and the refusal says why rather than failing quietly.
Agreements carry a start and an expiry. HMRC's position in Notice 700/62 is that a self-billing agreement runs for a set period, typically twelve months, and has to be renewed. An expired agreement is not a formality: invoices raised under it are not valid VAT invoices, and the input tax on them is at risk.
What lands on the invoice
- The supplier's own details, marked as the supplier rather than the customer.
- The wording HMRC requires on a self-billed document, so it reads as one.
- VAT treated according to the supplier's own registration, not the agency's.
- A sequential number in its own series, separate from the agency's sales invoices.
Where the figures come from
An invoice is generated from an approved week at the placement's pay rate. Nothing is retyped, so the amount on the invoice and the hours the client signed off cannot drift apart. One invoice per timesheet is enforced by the database as well as the service, so a double click does not produce a double payment.
Payment terms and the export
Workers and umbrella companies each carry their own payment terms in days, so the due date on a self-billed invoice reflects what you actually agreed with that supplier rather than a house default.
The Xero export produces a CSV of purchase invoices with the contact name resolved to the supplier the money is owed to: the umbrella company where one is in the chain, and the worker where there is not.
The law behind this is set out in the self-billing guide.
An invoice with its agreement behind it
The demo agency has live agreements, an expired one, and invoices raised from approved weeks on both routes.