The UK government has launched a consultation of e-invoicing to explore the introduction of electronic invoicing, that would provide HMRC greater information on company and public sector transactional data.
The consultation, which can be found here, is open until 7 May 2025 and is asking for the views from businesses on whether e-invoicing should become the industry standard or voluntary and how it might integrate into the UK tax system.
The consultation does not give an indication on when e-invoicing might be adopted, but its Making Tax Digital programme suggests a date of 2030.
For many businesses and especially those with customers and clients in the European Union, e-invoicing will become necessary following the introduction of its VAT in the Digital Age (ViDA) programme. You can read more about ViDA in our article here.
E-invoicing essentially allows the automated digital exchange of invoice and sales data between a buyer and seller, effectively removing the need for paper or PDF invoicing. It means that invoices will need to be presented in as yet to be defined digital formats that are machine readable.
For many businesses, that will require upgrading or making a considerable investment in new accounting software platforms to meet any changes.
The consultation asks businesses for their views around several areas including:
- Whether e-invoicing should be mandatory for certain transactions, such as business to public sector transaction.
- Whether it should be linked to real time digital reporting, already adopted in countries like Italy and South Korea.
- Whether e-invoicing should operate under a centralised model that is run through a government portal (as currently adopted in Italy) or a decentralised model with businesses free to choose their preferred software provider (adopted in Australia and Belgium).
The consultation also seeks to understand the extent to which businesses already use e-invoicing and points out the benefits of e-invoicing, saying it would offer businesses great VAT accuracy when submitting returns, reduce compliance interventions and offer greater economic data.
Businesses are encouraged to share their thoughts before 7 May, but with an estimated 130 countries having already introduced or are planning to introduce e-invoicing the writing is perhaps already on the wall.
If, as a business, you would like to contribute and would like some guidance or contribute anonymously to the submission that Hillier Hopkins LLP will be submitting, please contact our expert below.
