A pro forma invoice is a preliminary bill you send before a sale is final: it sets out what you'll supply and what it'll cost, so the buyer can approve it or pay upfront. It isn't a tax invoice, and HMRC says it can't be used as evidence to reclaim VAT, even if it shows every detail a VAT invoice would.
Think of it as a quote dressed as an invoice. It's useful when a customer needs a formal document to raise a purchase order, get budget sign-off or pay in advance, but the legal paperwork still comes later. In the US it also has a specific customs meaning, which I'll come to.
Pro forma invoice vs a real invoice
| Pro forma invoice | Invoice (or VAT invoice) | |
|---|---|---|
| When it's sent | Before the sale is confirmed or the goods are supplied | After the supply or once payment is received |
| Is payment legally due? | No, it's an offer | Yes, on the agreed terms |
| Can the buyer reclaim VAT on it? (UK) | No | Yes, if it's a valid VAT invoice |
| Typical label | Pro forma, or this is not a VAT invoice | Invoice, or tax invoice |
What HMRC says about pro forma invoices
HMRC's VAT guide (Notice 700) covers this in section 17.3. It says pro forma invoices are often used to offer goods or services to potential customers, where the offer may or may not be taken up, and the goods or services won't be supplied unless payment is received. Three rules follow from that:
- A pro forma invoice can't be used as evidence to reclaim input tax, even if it shows all the details required for a VAT invoice.
- You should make sure it's clearly marked this is not a VAT invoice.
- Once you supply the goods or services, or receive payment, you must issue a VAT invoice.
HMRC repeats the point in its section on keeping invoices: you can't use an invoice marked pro forma or this is not a tax invoice as evidence for reclaiming input tax. So if you're the buyer, don't file the pro forma as your VAT record. Chase the real one. And as a VAT-registered seller, HMRC says you'd normally issue a VAT invoice within 30 days of the tax point, which is when the supply or payment happens.
What to put on a pro forma invoice
- The words Pro forma invoice at the top, and this is not a VAT invoice if you're VAT registered
- Your business name, address and contact details
- The customer's name and address
- A reference number and date, kept separate from your invoice numbering
- A full description of the goods or services, with quantities and prices
- Any delivery, packing or other charges
- How long the offer is valid and your payment terms
- How to pay, if you're asking for payment upfront
Keeping a separate numbering series matters. If your pro forma numbers sit in the same sequence as your invoices, your records will show gaps whenever a customer doesn't go ahead. My guide to invoice payment terms covers the wording for the terms line.
The US customs meaning
In US customs law a pro forma invoice is something more specific. Under 19 CFR 141.85, an importer who doesn't have the commercial seller's or shipper's invoice can submit a pro forma invoice instead: a statement of value or price paid, set out in the form the regulation gives. It asks for the shipper, seller, consignee and purchaser, whether the goods have been bought, the basis for the prices (from the order, the exporter's advice, earlier shipments or market knowledge), and a table of quantities, descriptions, unit and total prices, and which charges such as packing and inland freight are included.
So if a US customer or customs broker asks you for a pro forma, check which they mean. A broker usually wants the customs version for a shipment where the commercial invoice isn't available yet.
When to use one
| Situation | Pro forma? |
|---|---|
| A client needs a document to raise a purchase order | Yes |
| You want payment in full before you start work or ship | Yes |
| Goods are shipped and the customer needs a VAT record | No, send a VAT invoice |
| You've finished the work and want to be paid on terms | No, send an invoice |
If you're wondering whether you have to invoice at all in a given situation, my explainer on whether issuing an invoice is a legal requirement looks at that, and whether an invoice always comes before payment covers the upfront payment question.
My verdict
Use a pro forma when you need a customer to commit or pay before you deliver, label it clearly, and give it its own number. Then, the moment you're paid or you supply, raise the real invoice. If you're the one receiving a pro forma, pay it if you're happy, but don't put it in your VAT return. Wait for the VAT invoice, because HMRC won't accept the pro forma as evidence.
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Frequently asked questions
What is a pro forma invoice?
A pro forma invoice is a preliminary invoice sent before a sale is final, setting out the goods or services and the price so the buyer can approve or pay in advance.
Is a pro forma invoice a legal invoice?
No. It's an offer, not a demand for payment, and in the UK it isn't a VAT invoice.
Can you reclaim VAT on a pro forma invoice?
No. HMRC says pro forma invoices can't be used as evidence to reclaim input tax, even if they show all the details required for a VAT invoice.
What should a pro forma invoice say?
HMRC says it should be clearly marked this is not a VAT invoice. It should also show both parties' details, the goods or services, prices, charges and payment terms.
When do you replace a pro forma with a VAT invoice?
When you supply the goods or services, or receive payment, you must issue a VAT invoice. HMRC says this is normally within 30 days of the tax point.
Should a pro forma invoice have its own number?
It's sensible to give pro forma invoices their own reference series, separate from your invoice numbers, so your invoice sequence has no gaps when a customer doesn't go ahead.
What is a pro forma invoice for US customs?
Under 19 CFR 141.85 it's a statement of value or price paid that an importer can submit when they don't have the commercial seller's or shipper's invoice.
