E-Invoicing in the United Kingdom (B2G E-Invoices)
UK's Mandatory B2G E-Invoicing for NHS via Peppol Network, Voluntary B2B E-Invoicing and B2C E-invoicing, Consultation Underway for Nationwide Mandate by 2029
Last modified on 2025-12-29 in Blog
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His Majesty's Revenue and Customs
Post-audit
2019
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6 years
The United Kingdom stands out as a country that balances flexibility with smart regulation in its approach to electronic invoicing. The UK is undergoing a gradual transformation in its invoicing and tax compliance systems.
E-invoicing in the United Kingdom was initiated with the Making Tax Digital program in 2019. Currently, only invoices sent to the National Health Service (NHS) must be in electronic format, but as the UK continues to follow principles similar to Directive 2014/55/EU, that is likely to expand to more transactions. While B2B e-invoicing remains voluntary, the government's 2025 public consultation has now confirmed that e‑invoicing will become mandatory for all B2B VAT invoices from 1 April 2029.
In 2025, the UK government launched a comprehensive public consultation on nationwide e-invoicing, led by HMRC and the Department for Business and Trade (DBT). Chancellor Rachel Reeves announced plans for mandatory e-invoicing as part of the Digital Transformation Roadmap, aiming to close the £7.5 billion VAT gap and modernize tax compliance by 2029.
The consultation, which closed in May 2025, sought input on implementation models, mandatory versus voluntary approaches, and real-time digital reporting. Since April 2023, businesses making over £10,000 annually must submit periodic MTD reporting, expanding digital requirements to smaller entities.
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E-invoicing goes beyond digitizing paper invoices, it creates machine-readable, structured documents that enable automatic processing, seamless accounting system integration, and improved tax authority reporting.
The UK is implementing e-invoicing to tackle VAT fraud through better transaction monitoring while accelerating VAT refunds that improve business cash flow. The system reduces manual processing errors, speeds up payment cycles, and ensures legal authenticity through certified electronic signatures under the eIDAS framework.
While large corporations already operate advanced internal solutions, nationwide adoption is gathering momentum as authorities focus on the long-term benefits of transparency and efficiency through the Making Tax Digital initiative.
This digital shift also aligns the UK with EU regulations and standards like EN 16931, positioning British businesses for seamless cross-border trade in Europe's increasingly connected marketplace.
Despite the UK leaving the EU through Brexit, they decided to continue to enact Directive 2014/55/EU for ease of cross-border trade.
The UK's e-invoicing story spans several years of development, marked by multiple legislative and technical updates:
The United Kingdom is a country where electronic invoicing is not yet widespread, as it falls outside EU regulations. While there are some niche-specific requirements, such as B2G, broad e-invoicing adoption is only expected to ramp up between 2020 and 2030. What is particularly interesting, however, is that UK companies aiming to scale into the EU must comply with EU e-invoicing mandates.
E-invoicing for B2G transactions is only required for sending invoices to the National Health Service (NHS). Although there is no general mandate, public entities are still required to be able to receive and process e-invoices.
The public sector in the UK mandates standardized electronic invoicing procedures for NHS suppliers through the Peppol network, which complies with principles similar to EU Directive 2014/55.
In the UK, using Peppol for e-invoicing is currently mandatory only for suppliers to the National Health Service (NHS). These suppliers must send electronic invoices in the Peppol BIS 3.0 format through certified Peppol Access Points. For all other businesses and public sector bodies, e-invoicing via Peppol is voluntary, although buyers must be able to receive e-invoices that meet European standards.
The UK government is actively consulting on wider mandatory e-invoicing rules and may introduce a full mandate after 2026, but no general e-invoicing obligation exists yet for business-to-business transactions outside NHS.
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Despite there being no B2B e-invoicing mandate, the UK has some requirements for those who choose to e-invoice. Unlike many EU countries, Currently, B2B e-invoicing in the UK remains voluntary and requires mutual agreement between trading partners. However, the government has now confirmed that e‑invoicing will become mandatory for all B2B VAT invoices from 1 April 2029, potentially affecting up to 1.1 million VAT-registered businesses.
The aim is to make tax reporting faster and more modern, like in other EU countries such as Italy, where B2B e-invoicing has been required since 2019.
By considering the advantages of digital invoicing, such as compliance, operational streamlining, and improved security, the UK is laying the foundation for a more connected and competitive economy.
At present, B2C e-invoicing remains voluntary in the UK. Businesses may choose to issue consumer invoices electronically, but there is no mandatory platform or format requirement for consumer transactions.
Unlike some European countries, the UK does not currently have mandatory fiscalization requirements for B2C transactions with real-time reporting to tax authorities. However, all businesses must maintain proper VAT records under Making Tax Digital requirements if their turnover exceeds the applicable thresholds.
The UK government may consider extending e-invoicing requirements to B2C transactions as part of ongoing digital fiscal reforms, following the lead of countries Poland, Germany, Romania, Spain and France.
Foreign companies with a UK VAT registration must comply with UK invoicing requirements, including proper VAT record-keeping and Making Tax Digital obligations. Those without UK VAT numbers must ensure their UK customers can properly account for VAT under reverse charge mechanisms where applicable.
Cross-border invoices must meet both UK invoicing requirements and the originating country's legislation, recognizing the complexities of post-Brexit trade. E-invoices must include proper VAT registration numbers for cross-border transactions and comply with EN 16931 standards for compatibility.
Invoices submitted without required data or outside the 30-day issuance timeline may face challenges in VAT reclaim procedures and HMRC compliance checks.
In the UK, VAT is managed through periodic tax reporting rather than any transaction‑by‑transaction submission of data. HMRC does not use the SAF‑T file format adopted in several European jurisdictions; instead, the UK relies on the Making Tax Digital (MTD) framework for VAT compliance monitoring. Under MTD, businesses with taxable turnover above the current VAT registration threshold (normally £85,000) must keep digital VAT records and submit VAT returns electronically using compatible software, ensuring digital links from source records to the VAT return.
Penalties for non-compliance with e-invoicing regulations in the UK can include fines and restrictions, depending on the sector and specific rules. Currently, the UK does not impose penalties for simply not adopting e-invoicing, but failure to issue compliant invoices when required can lead to penalties. Non-compliance can also result in operational disruptions, financial costs, and potential audits.
Choosing the right e-invoicing provider is key to easily meeting the UK's current and future e-invoicing rules. Providers need to support smooth integration with Peppol for NHS suppliers, handle various e-invoice formats, ensure MTD compliance, and manage the evolving regulatory landscape efficiently.
DDD Invoices is the UK's proven Peppol specialist, delivering direct network connectivity that fully automates your invoice lifecycle, from creation through transmission to secure archiving. We transform complex compliance requirements into streamlined operations that protect your business and enhance efficiency.
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Currently, there is no mandatory B2B e-invoicing requirement in the UK. E-invoicing is only mandatory for NHS suppliers through the Peppol network since March 2022. However, the government's 2025 consultation indicates broader B2B mandates could be introduced by 2029 as part of HMRC's Digital Transformation Roadmap.
Making Tax Digital makes VAT reporting easier by requiring businesses to keep digital records and submit quarterly VAT returns through MTD-compatible software. For those with taxable turnover above £85,000, MTD introduced an online digital system for VAT tax reporting. Since April 2023, all businesses making over £10,000 annually must submit periodic MTD reporting. This helps prevent errors, improves record accuracy, and lays the groundwork for potential future e-invoicing mandates.
Yes, B2C e-invoicing is currently voluntary in the UK. Businesses can choose to issue electronic invoices to consumers in any format they prefer, though there is no standardized platform requirement or mandatory fiscalization for consumer transactions at this time.
Written by the Compliance team
Reviewed by Denis V. P.
DDD Invoices is an enterprise-grade platform delivering a powerful infrastructure for creating, sending, receiving and storing electronic documents. DDD Invoices enables software providers like ERPs, SaaS, eCommerce, POS systems, accounting & invoicing softwares, billing services and others, to easily adhere to global invoicing compliance requirements and shorten their time-to-market.