Regulatory updates - United Kingdom

On November 26, 2025, the UK government published Budget 2025, confirming a major step toward digitalising tax administration.

As part of a broader investment in HMRC, the government will require all VAT invoices to be issued electronically from April 1, 2029. A detailed implementation roadmap will be developed in consultation with stakeholders and published at Budget 2026.

E-invoicing is expected to reduce administrative burdens, improve reporting accuracy, accelerate payments, and help close the VAT gap. The UK’s move aligns with the EU’s VAT in the Digital Age (ViDA) initiative, which will require e-invoicing for cross-border transactions from July 2030. 

HMRC has detailed its “digital by default” approach in their transformation roadmap. While the roadmap encompasses making tax and customs systems modernized and fully digital, a focal point also addressed in this context is e-invoicing.

Building on the progress made by the MTD scheme (Making Tax Digital), the UK’s proposed introduction of e-invoicing is part of a broader strategy to address issues associated with non-compliance related to tax matters. HMRC and DBT have collaborated on increasing the adoption of e-invoicing in the private and public sectors.

The responses to the public consultation released by both HMRC and DBT that closed in May 2025 will be used to direct the approach the UK will take regarding widespread adoption of e-invoicing.

On February 13, 2025, the UK took yet another step towards implementing e-invoicing across the country, as the public consultation was launched, and the open consultation document was published.

The public consultation document addresses the main benefits of an e-invoicing system while keeping the outlook on how such a system should look open. The document underlines the importance of establishing common e-invoicing standards to facilitate trade and for business systems to effectively interact with each other. Furthermore, it underlines that increased adoption of e-invoicing may improve productivity, cashflow, simplify tax reporting, and reduce the tax gap.

As part of the agenda to increase adoption rates, these initial stages will therefore focus on open policymaking and strong engagement, as HMRC (His Majesty's Revenue and Customs) and DBT (Department for Business and Trade) seek opinions into four broad areas:

• Models of e-invoicing, infrastructure and format;
• Whether e-invoicing should be mandated or voluntary;
• Which actors should be in the scope of a mandate;
• Whether e-invoicing should be complemented by real-time digital reporting.

The consultation will guide future decision-making

HMRC and DBT emphasize that the responses aim to inform future decision-making, and no timelines or actions following the public consultations are announced at this stage.

How to participate in the consultation

Stakeholders participating in the consultations may send responses either through the official public consultation form or via e-mail to: [email protected], no later than May 7, 2025.