Autumn Budget 2025: E-invoicing will go ahead from 2029

E-invoicing will be mandatory from April 2029 following the 2025 consultation but won’t include real-time reporting to HMRC (at least initially).

E-invoicing in the UK – current position

Currently, e-invoices can be used in the UK but there are no standards setting out their format, content, application or delivery, other than for suppliers to NHS England who must use a specific online network. Take-up of e-invoicing is low. Among other deterrent factors, businesses may be unwilling to invest in the necessary systems, if they don’t know whether customers and suppliers will accept them.

Earlier in 2025, the government consulted on proposals to increase the adoption of e-invoicing across UK businesses and the public sector. E-invoicing has been in use globally for over 20 years with an increasing number of countries mandating its use for certain types of transactions. The government believes that the benefits of e-invoicing in the UK could include improved productivity and business cashflow, and simplified tax reporting. 

We responded to the consultation and held an ICAS discussion with the consultation team to give input. We stressed that interoperability and a common standard for e-invoicing would be essential and highlighted potential impacts (including cost) on smaller businesses, that would need to be considered. We also suggested that if the government decided to proceed with mandatory e-invoicing, it should set a future date with a realistic timetable for implementation; at least two years would be necessary for some businesses. This would be preferable to a setting a short deadline which then has to be deferred when it becomes clear that it’s unworkable. 

Autumn Budget 2025 – e-invoicing will be mandated in the UK

The government announced in the Autumn Budget that e-invoicing will go ahead in the UK from April 2029. All VAT invoices will have to be issued in a specified electronic format from that date. There will be further engagement with stakeholders to develop an implementation roadmap (to be published at Budget 2026).

A detailed consultation outcome was published on Budget day – key points included: 

• Making e-invoicing mandatory will address the problems of inconsistent adoption among suppliers and business customers. The government will develop e-invoicing standards which enable interoperability and balance flexibility and simplicity. The ability to accommodate sector-specific needs will be taken into account. The intention is that whichever software provider a business selects it will be able to exchange invoices with other UK VAT-registered businesses.
• Some stakeholders (including ICAS) flagged concerns about particular practices (including self-billing and the VAT reverse charge). The government response notes that HMRC has been able to confirm that these have been addressed in other jurisdictions.
• Concerns about potential costs (including software acquisition, system upgrades and staff training) particularly for smaller businesses, are noted in the outcome document. Support for businesses to adopt e-invoicing will form a key part of the implementation roadmap, including ensuring that the UK regime supports the development of low cost, easy to use e-invoicing solutions. Clear guidance, tailored for different audiences will also be incorporated into the implementation plan.
• A majority of respondents (including us) supported the government’s focus on a decentralised model for e-invoicing (ie not a centralised model where invoices would have to be issued via a government platform for validation). This will continue to be the UK approach.
• Real-time reporting (RTR) to HMRC won't be implemented in 2029. However, the potential benefits of RTR will continue to be explored. These could include improved HMRC ability to target compliance activity and identify fraud – and for compliant businesses, reduced risk of compliance visits and simplified VAT return preparation. RTR data feeds could also help the government to support businesses in any future economic emergency. If RTR is introduced later, once e-invoicing is well-established, the aim will be to make reporting as seamless as possible for businesses.

We look forward to contributing to the development of the implementation roadmap and would welcome feedback from members. 

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