What is a proforma invoice? Meaning, template and uses

A proforma invoice is a document laid out like an invoice that tells a customer what they will pay if they go ahead with an order. It is sent before the sale, often to collect payment upfront, and it is not a real invoice. HMRC says it cannot be used to reclaim VAT, so a proper invoice must follow once the sale happens.

What does proforma invoice mean?

A proforma invoice is a good-faith estimate of a sale, set out in invoice format. “Pro forma” is Latin for “as a matter of form”. HMRC’s VAT Traders’ Records Manual at VATREC9010 (updated 16 January 2025) describes it as a document that sets out what will be supplied if payment is made, with the goods or services supplied only once payment arrives.

The same page says a proforma “cannot be considered to be an accounting document” and does not belong in the books of either business. You do not record it as a sale or a debt.

Is a proforma invoice a VAT invoice?

No. HMRC’s VAT Notice 700 says at section 17.3 that proformas “cannot be used as evidence to reclaim input tax, even if they show all the details required for a VAT invoice.” Section 19.5.1 repeats that an invoice marked “pro-forma” or “this is not a tax invoice” cannot support a VAT claim.

HMRC advises two safeguards:

• mark the document clearly as a proforma, preferably with “This is not a VAT invoice”
• issue a full VAT invoice once you are paid or supply the goods

VATREC9020 says that full VAT invoice must be issued within 30 days, and the tax point follows the normal rules. Notice 700 (section 14.2.2) also says “a tax point cannot be created simply by preparing an invoice”, so sending a proforma does not by itself trigger VAT.

Proforma invoice vs invoice vs quote

A proforma sits between a quote and an invoice. The table shows the main differences.

A proforma is usually more detailed than a quote. It often shows the exact quantities, delivery terms and bank details so the customer can pay straight away.

When should you use a proforma invoice?

Use one when you want the customer to commit, or pay, before you supply. Common uses are:

• Payment in advance: HMRC notes proformas are often used for new customers or those with doubtful credit, so you are paid before you deliver.
• Customer approval: a buyer’s finance team may need a formal document to raise a purchase order or release funds.
• Finance applications: a customer may need a proforma to apply for a loan or grant for the purchase.
• Shipping goods: couriers and customs may ask for a document showing the value of goods, such as samples, that are not being sold. Check the courier’s and destination country’s rules.

Proforma invoice template: what to include

There is no legal format for a proforma, but it should hold the same details as the invoice that will follow. GOV.UK’s guide to what invoices must include is a good base. Your template should show:

1. The heading “Proforma invoice” and the words “This is not a VAT invoice”.
2. A reference number, kept separate from your sales invoice numbers.
3. Your business name, address and contact details; for a company, the full registered name.
4. The customer’s name and address.
5. Date issued and how long the offer is valid, for example 30 days.
6. A description of each item, with quantity and unit price.
7. The net amount, the VAT rate and amount (if VAT registered) and the total.
8. Payment terms, bank details and expected delivery date.

Keep proforma numbers in their own series. A full VAT invoice needs “a sequential number based on one or more series which uniquely identifies the document” (Notice 700, section 16.3.1), and mixing proformas into that series causes gaps. The VAT calculator helps you split net and gross amounts.

Step by step: from proforma to paid

1. Send the proforma with a validity date.
2. Customer pays, or confirms the order.
3. Supply the goods or services.
4. Issue a full sales invoice (a VAT invoice if registered) within 30 days.
5. Record the sales invoice in your books and on your VAT return, not the proforma.

What to do now

Check that your accounting software has a proforma or quote option that does not post to the ledger. Most packages let you convert a proforma into an invoice in one click. If you are chasing slow payers instead, our guide to cash flow covers other ways to get paid sooner.

Frequently asked questions

Is a proforma invoice legally binding?

A proforma on its own is not a demand for payment. If the customer accepts it and you agree terms, the resulting contract is binding, so make sure the prices and terms are ones you will honour.

Can I claim VAT back on a proforma invoice?

No. HMRC says proformas cannot be used as evidence to reclaim input tax. Ask the supplier for a full VAT invoice once you have paid.

Do I record a proforma invoice in my accounts?

No. HMRC’s manual says a proforma is not an accounting document. Record the final sales invoice, and any money received in advance against it.

How long after a proforma must I send a VAT invoice?

HMRC’s manual VATREC9020 says a full VAT invoice must be issued within 30 days of being paid or making the supply.

Does a customer have to pay a proforma within 30 days?

No. A proforma is an offer, so the customer chooses whether to pay. GOV.UK’s 30-day default payment period applies to invoices for goods or services already supplied, where no other date was agreed.