The UK is introducing mandatory e-invoicing for all VAT invoices - both B2B and B2G - from 2029. The decision was taken the other week when the UK Treasury was consulting on the upcoming budget.
The UK Labour government emphasizes that they want to harness the power of digital technology. "In this respect, e-invoicing is a crucial tool for streamlining core business operations," they write in a summary.
So far, few details have been finalized, but there are many indications that the UK is opting for a 4-cornered model of invoice exchange. In practice, similar to how Peppol is used in many European countries.
An important part of the announcement is that the reform does not seem to include any direct e-reporting to HMRC at this stage, although it does not rule out that reporting requirements may come later.
A more concrete plan is not expected until the November 2026 budget, when the government is expected to announce the design, scope and practicalities of implementation. There are also indications that the requirement may be phased in gradually, with larger businesses being the first to go when the 2029 start date comes into force. The UK has 2.72 million VAT registered businesses. The idea of a longer phasing-in period is certainly sensible.
The tentative timeline discussed in the industry started with a public consultation in February-May earlier this year, followed by a more formal announcement at the Autumn Budget (November 26) on e-invoicing without e-reporting.
The years 2026 and 2027 are expected to be characterized by work on legal and technical specifications, several rounds of consultations and market preparations.
In 2028, the focus is expected to be on build, test and pilot.
If the plan holds, 2029 could be the starting point for large taxpayers, followed by a second phase in 2030 that will include smaller businesses. For suppliers and invoice recipients, this new and fresh message sends a clear message:
Start planning in time. The UK is moving towards a new standard for how business is invoiced.
Preliminary timeline:
Early 2026 (from January onwards): Engagement and consultation begins.
Budget 2026: The official implementation plan and technical details are expected.
2027-2028: Development, pilot programs and parallel operations.
April 2029: Mandatory e-invoicing for all VAT invoices introduced.