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UK HMRC B2G & B2B e-invoicing consultation

HMRC launches public consultation on electronic invoicing to government and businesses

The UK Chancellor on 23 September unveiled a package of reforms to improve the UK’s tax system to help fix the foundations of the UK economy.

As part of the package, HMRC will soon launch a consultation on electronic invoicing (e-invoicing) to promote its wider use across UK businesses and government departments. Scoping and timing of the consultation will be announced at the 30 October Autumn Budget. The consultation is likely to be in Spring 2025.  HMRC had hinted at an e-invoicing mandate in October 2023 when looking at stubborn e-commerce VAT fraud.

Currently, there is no obligation to use B2B e-invoicing. For B2G, only sales invoices to NHS bodies must use EN16931 based e-invoicing via Peppol network access points. All public bodies must be able to accept structured e-invoices if their supplier prefers.

No launch before 2029; unlikely to be government pre-clearance model

Similar successful (!) e-invoicing launch schedules by tax authorities are at least 3 years long. This includes a year each for phases on:

  • consultation and reporting back conclusions;
  • legal and technical specifications development; and
  • build, test and pilot phases.

So any launch could only come in 2029 at the earliest. This may include a phased introduction, firstly mandating larger businesses followed a year later by small businesses.

In terms of model, it is unlikely the UK will favour an invasive pre-clearance government e-invoicing, and instead promote voluntary standards, including PEPPOL.

The UK could look to the widely-praised Belgium 2026 two-staged plan:

  • firstly mandating e-invoicing between businesses with PEPPOL option;
  • at a later date, adding digital reporting to the tax authorities of summary e-invoice information.

HMRC has already adopted the EU invoicing standard EU Directive 2011/55/EU and the EN16931format. The UK is also looking to close the £8.2 bn VAT Gap and will be evaluating setting nation-wide standards and considering making the use of e-invoices mandatory.

UK taxpayers may already voluntarily use electronic invoices on B2B transactions if they have mutual agreement between parties. An e-invoice contains the same information as a paper invoice, but is in a structured, machine readable electronic format. HMRC’s Making Tax Digital for VAT introduced VAT return digital filing in 2019, followed by 2021 digital journey requirements for preparing VAT returns.

EU member states already raising billions with digital reporting

The EU is considering a single standard via its VAT in the Digital Age reforms. Countries such as Italy have already demonstrated major tax revenue boosts from their e-invoicing implementations. Countries such as France, Germany, Poland and Belgium have their own domestic versions launching shortly.

The introduction of e-invoicing can significantly reduce administrative tasks, improve cash flow, boost productivity, introduce automation, and reduce errors in tax returns – all helping to close the tax gap. The consultation will gather input from businesses on how HMRC can support investment in and encourage e-invoicing uptake.

E-invoicing to fight VAT evasion

The UK Treasury is keen to tap into the ability of e-invoicing to uncover tax evasion, and help close the national deficit.

E-invoicing, which originated in South America, can help tax authorities detect tax fraud by providing real-time access to transaction data, ensuring greater transparency. Each invoice is digitally authenticated with unique identification numbers and timestamps, reducing the risk of duplication or manipulation. This system allows tax authorities to track the movement of goods and services across the supply chain, ensuring that businesses accurately report sales and input tax credits. It also helps match reported invoices between buyers and sellers, flagging discrepancies for further investigation. By automating tax reporting, e-invoicing minimizes errors, increases compliance, and makes fraudulent activities like underreporting or fake invoicing easier to detect.

UK e-invoicing rules still follow EU VAT

The UK’s e-invoice rules are primarily shaped by VAT regulations and efforts to align with digital business practices. E-invoicing is allowed but not mandatory in the UK, and its usage is governed by HMRC. Businesses must ensure that e-invoices meet the same legal requirements as paper invoices, including essential details such as supplier and customer information, VAT number, description of goods or services, total VAT due, and invoice date.

To be valid, an e-invoice must be authentic, intact, and legible. Authenticity refers to verifying the origin of the invoice, integrity ensures no alterations, and legibility means that the invoice can be easily read, both when sent and stored.

Storage requirements also apply, and invoices must be kept for six years in a format that guarantees access, readability, and retrieval. The UK has embraced the EU’s VAT Invoicing Directive, which allows electronic and paper invoices to be treated equally for tax purposes. Although the UK left the EU, these guidelines continue to apply, supporting businesses’ transition to digital systems. Moreover, MTD initiative encourages businesses to adopt digital tools, including e-invoicing, for VAT compliance.

Europe e-invoicing and live reporting

Country Date Comments (click for details)
EU e-invoice proposals 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
Bulgaria TBC Public consultation on pre-clearance model e-invoice
Croatia Jan 2026 B2B mandatory e-invoicing
Denmark 2024 Digital record keeping obligations
Estonia Jul 2025 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
Greece 2025 e-invoicing based on exiting myDATA digital reporting
Hungary Jul 2018 RTIR live invoice reporting. No govt pre-clearance required
Hungary Jan 2024 eVAT pre-filled returns based on live invoice reporting
Italy Jan 2019 Micro businesses join SdI e-invoicing Jan 2024
Ireland TBC Public consultation underway
Latvia Jan 2026 B2B e-invoices based on PEPPOL
Lithuania TBC E-invoicing platform being scoped
Moldova TBC Extension consultation for 2025
Montenegro TBC B2B mandatory e-invoicing preparations
Netherlands No mandate planned Unlikely to adopt domestic reforms
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
Serbia Jan 2023 B2B e-invoicing
Slovakia 2025 B2B and B2C e-invoice rollout
Slovenia Jun 2026 B2B e-invoicing mandate
Spain 1 Jul 2017 SII live invoice and book reporting
Spain 3 Jan 2026? Certified e-invoicing software VERI*FACTU
Spain 3 Jan 2027? Pre-clearance B2B e-invoices; supplement to SII
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 Oct 2024 E-invoicing consultation

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