Recruiter invoice template

How do recruiters usually invoice?

Recruiters invoice a permanent placement fee as a percentage of the candidate's first year salary on the day the candidate starts, with a rebate scale if they leave within the first 8 to 12 weeks written into the terms. Retained search is invoiced in three stages: on engagement, on shortlist and on placement. Terms are tighter than other professional services, usually 14 days, because the fee is large and the rebate period is running.

Recruiters in this example give the customer 14 days to pay. Hourly rates run from £40 to £90.

What should a recruiter put on an invoice?

Beyond the legal basics, recruiters should:

• State the candidate, role, start date, salary and percentage so the fee calculation is transparent.
• Invoice on the start date, not the offer date, and reference the rebate terms.
• For retained search, invoice each stage separately with the stage named.
• Quote the client's terms of business reference and the date they were signed.

Every UK invoice, whatever the trade, must also show:

• a unique, sequential invoice number
• your business name and address (and company number if you trade as a limited company)
• the client’s name and address
• the invoice date and, for VAT invoices, the date of supply if different
• a clear description of each item of work or goods
• the amount due and when it must be paid
• your VAT number, the VAT rate per line and the VAT total, if you are VAT registered

Do recruiters charge VAT?

You only charge VAT once registered, which is compulsory when taxable turnover passes £90,000 in any rolling 12 months. Below that, show no VAT line and no VAT number. Once registered, these services are standard rated at 20% for UK clients; services to business clients outside the UK are generally outside the scope of UK VAT.

On the Flat Rate Scheme the sector for recruiters is usually “Business services not listed elsewhere” at 12% of VAT-inclusive turnover, with a 1% discount in the first year of registration. If you spend little on goods you may be a limited cost trader and have to use 16.5% instead. The scheme suits businesses with few VAT-able costs; check it against the standard method with the VAT calculator before joining.