UK Set to Explore E-invoicing

The UK government is exploring electronic invoicing (e-invoicing) as part of its effort to modernise the tax system and close the tax gap. This development aligns with the new government’s goals of fostering productivity and reforming HMRC to improve customer service and further digitise the tax system, all while strengthening the UK’s economic foundations. E-invoicing is being proposed as a method to enhance administrative efficiency, boost business productivity, and ensure timely, accurate tax submissions.

E-Invoicing Consultation

The initial stage will be the launch of a consultation on electronic invoicing. The consultation, led by HMRC, aims to gather feedback from businesses on how best to support investment in and promote the widespread use of e-invoicing across both the private and public sectors. As the consultation progresses, businesses will have the opportunity to shape how e-invoicing is implemented, ensuring the system is practical, effective, and beneficial for various sectors.

The consultation runs from 13 February 2025 to 7 May 2025, and businesses of all sizes, interest groups, and industry bodies are encouraged to contribute.

Read more about the consultation here.

E-Invoicing Digital Roadmap – Spring 2025

In support of this transformation, a Digital Transformation Roadmap is expected by Spring 2025, which will outline steps to establish HMRC as a ‘digital-first’ organisation. Importantly, this roadmap will include measures to ensure digital inclusion, ensuring businesses of all sizes and capabilities can adopt e-invoicing.

E-invoicing Benefits

E-invoicing offers a range of advantages for UK businesses, particularly in reducing administrative burdens, improving cash flow, and minimising human error. By automating invoice processing, businesses can streamline their operations, reduce the likelihood of mistakes, and facilitate faster payments. The latter being an essential benefit for small and medium-sized enterprises (SMEs).

Under the government’s plans e-invoicing aims to improve tax accuracy and speed up processing times, combatting the tax gap and fraudulent activity. The Office of the Small Business Commissioner also supports the initiative, highlighting its potential to reduce late payments, which cost the UK economy £27 billion annually.

Current B2G Strategy

Although the UK currently has a limited Business-to-Government (B2G) e-invoicing system in place, it only mandates that public administrations accept electronic invoices adhering to the EN 16931 standard. Suppliers, however, are still permitted to send invoices in various formats, including PDFs or paper copies.

Next steps for E-Invoicing in the UK

While no specific deadlines or details about the consultation process have been provided, this development marks a significant step toward modernising the UK’s tax system. Further information is expected soon as the government seeks feedback on how to encourage wider e-invoicing use across sectors.

To learn more about how e-invoicing can benefit your business and ensure you’re prepared for upcoming changes, contact TrueCommerce.

As experts in e-invoicing solutions, we can help you streamline your invoicing processes, improve productivity, and stay compliant with evolving tax regulations. Reach out to TrueCommerce today for guidance and support in adopting e-invoicing.