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UK HMRC – £900m savings from Making Tax Digital for VAT

Up to £900m in VAT compliance costs saved in MTD digital filings

On 27 February 2025, the UK’s HMRC published an estimate of the cost savings and wider benefits from its rollout of digital VAT filing initiative, Making Tax Digital for VAT.  VATCalc’s VAT Filer is recognised by HMRC for UK VAT returns submissions and digital record keeping.

Making Tax Digital is a key part of HMRC’s transformation of the tax system to make it easier for taxpayers to get their tax right first time, help reduce scope for error and enhance customer experience. Since April 2022 all VAT businesses should be using MTD compatible software to keep digital records and submit returns.

HMRC believes a time saving of between 32 million hours and 49 million hours in the 2022 to 2023 tax year across all businesses in Making Tax Digital for VAT using fully functional software. The financial value of this time is estimated to be between £603 million and £915 million.  This is based on a survey of 2,300 VAT payers.

MTD for VAT is the UK’s first stage of digitising tax reporting and will be rolled out to other taxes in the next few years, including Income Tax is set to be mandated in 2026 or 2027 depending on the taxpayer’s threshold.

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MTD for VAT roll out

HMRC rolled out its MTD for VAT programme in three stages:

  • April 2019 – mandated VAT registered business to file their regular return via the new API portal
  • April 2021 – digital bookkeeping and digital links requirements introduced. At the same time, MTD for VAT requirements became subject to regular VAT penalty regime. This measure was originally scheduled for April 2020, but was delayed due to the COVID-19 pandemic.
  • April 2022 – all voluntarily VAT registered business below the VAT registration threshold of £85,000 must also comply with the above requirements.

Some VAT-registered businesses may be eligible for an exemption from Making Tax Digital, if it is not reasonable or practicable for them to use digital tools for their tax. If a business has previously been granted an exemption for VAT online filing, this will carry over to Making Tax Digital VAT requirements.

Europe e-invoicing

Country Date Comments (click for details)
EU ViDA e-invoicing 2030-35 Digital reporting and e-invoicing harmonisation
Albania Jan 2021 Authorised e-invoice software and pre-clearance
Belgium Jan 2026 Phased introduction of B2B e-invoices
Bosnia 2029 Proposed pre-clearance B2B and B2G e-invoicing
Bulgaria Jan 2028 B2B e-invoicing and e-reporting
Croatia Jan 2026 B2B mandatory e-invoicing
Denmark 2024 Digital record keeping obligations
Estonia 1 Jul 2025 Customers may require e-invoicing
Estonia 2 2027 Suppliers must offer customers e-invoicing option
Finland Apr 2020 Customer option to require B2B e-invoices
France Sep 2026 E-invoicing and e-reporting for B2B and B2C
Germany 2025-28 B2B mandatory e-invoicing proposals
Germany Jul 2030 Domestic e-reporting transactions
Greece Feb 2026 e-invoicing based on exiting myDATA digital reporting
Greenland Mar 2025 Mandatory B2G e-invoicing
Hungary Jul 2018 RTIR live invoice reporting. No govt pre-clearance required
Hungary 2 2028 E-invoicing consultation 2026
Italy Jan 2019 Micro businesses join SdI e-invoicing Jan 2024
Ireland Nov 2028 B2B e-invoicing & e-reporting phased mandate
Latvia Jan 2028 B2B e-invoices based on PEPPOL
Lithuania Jan 2028 E-invoicing platform being scoped
Luxembourg Jan 2028 B2B domestice transactions e-invoicing
Malta TBC Phased B2B e-invoicing & e-reporting
Moldova Oct 2026 E-invoicing mandate
Montenegro TBC B2B mandatory e-invoicing preparations
Netherlands Jul 2030 E-invoicing mandate
Netherlands Jul 2031 domestic e-reporting mandate
North Macedonia Apr 2027 E-invoicing mandate
Norway Jan 2027 E-invoicing and digital bookkeeping mandate
Poland Feb 2026 B2B mandated e-invoicing
Portugal Jan 2024 Certified invoicing software for non-residents
Portugal Jan 2024 ATCUD digital invoice signature for non-residents
Romania Jul 2024 RO e-invoicing implementation
Russia TBC Extension of Traceability Model to B2B on hold
San Marino 2027 e-invoicing mandate
Serbia Jan 2023 B2B e-invoicing
Slovakia Jan 2027 B2B and B2C e-invoice rollout
Slovenia Jan 2028 B2B e-invoicing mandate
Spain 1 Jul 2017 SII live invoice and book reporting
Spain 2 Oct 2028 Certified e-invoicing software VERI*FACTU
Spain 3 Oct 2027-28 One-year phased B2B e-invoicing exchange
Sweden TBC PEPPOL based mandatory e-invoicing
Turkey Jan 2014 e-invoice e-Fatura and e-Arşiv
UK Apr 2022 MTD for VAT extended to 1.1million taxpayers
UK Nov 2025 April 2029 B2B e-invoicing

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