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Electronic invoicing and e-Reporting in The United Kingdom

The electronic invoice in the United Kingdom follows similar principles to those established by European directives. Currently, its use for B2B transactions is optional and is only mandatory in the public health system. 

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Characteristics of Electronic Invoicing in the United Kingdom

The management and regulation of electronic invoices are overseen by His Majesty's Revenue and Customs (HMRC) and the Crown Commercial Service, which are responsible for ensuring compliance with tax regulations.

Currently, the use of electronic invoices is voluntary for private businesses (B2B) but mandatory in the public healthcare sector, where institutions must receive and process electronic invoices.

Additionally, the UK government has introduced the Making Tax Digital (MTD) initiative, requiring businesses to submit VAT records in digital format, ensuring more efficient and transparent tax management.

Mandatory Use

The use of electronic invoicing is only mandatory in the public healthcare sector, where institutions are required to receive and manage electronic invoices.

Starting in April 2029, the use of electronic invoicing will be mandatory for both B2B and B2G transactions.

Invoice Format

Although there is no mandatory electronic invoice format for widespread use, businesses working with the public sector and those subject to MTD regulations must adapt their systems to comply with the established electronic requirements.

Businesses that choose to use electronic invoicing voluntarily may use EDI standards such as UN/EDIFACT, EANCOM, ODETTE, XML, and even ASCII or PDF formats.

Electronic Signature

Applying an electronic signature to the invoice document is not mandatory.

Archiving

The defined storage period is six years. Invoices must be retained along with all related data, including evidence needed to demonstrate that authenticity and integrity have been ensured.

Administrative Requirements

Suppliers in the healthcare sector must meet two specific requirements:

  1. Have a Peppol Access Point to operate on the Peppol network.
  2. Use GLN and GTIN codes for their products and services, enabling their exchange through the GDSN network.

Tax Compliance

Businesses must be able to demonstrate the integrity, readability, and authenticity of invoice data to HMRC by using one of the following methods:

  • Reliable audit trails
  • Advanced electronic signatures
  • Electronic data interchange (EDI) with additional processes

Upcoming dates in United Kingdom

United Kingdom01/04/2029
e-Invoicing
Mandatory B2B and B2G electronic invoicing for all companies.
Know more
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Making Tax Digital

In the United Kingdom, businesses are required to file their VAT records electronically through the Making Tax Digital (MTD) system.

Making Tax Digital is the UK’s legislation for electronic VAT filing, which has been in effect since April 1, 2019. The implementation of MTD marks a significant step toward the digitalization of tax management in the UK, enabling businesses to streamline their processes and ensure more efficient compliance with HMRC regulations.

Mandatory Requirements

In the UK, businesses with VAT-taxable turnover exceeding £85,000 are required to comply with the following under the Making Tax Digital (MTD) system:

  • Maintain VAT records in a digital format, ensuring all tax data is stored electronically.
  • Submit VAT returns to HMRC via an API connection, eliminating any manual intervention.

What Information Must Be Included in an MTD Submission?

The VAT return submitted to HMRC must include the following nine mandatory fields:

  • VAT due on sales and other outputs during this period.
  • VAT due on acquisitions from other EU member states during this period.
  • Total VAT due (the sum of boxes 1 and 2).
  • VAT reclaimed on purchases and other inputs during this period (including acquisitions from the EU).
  • Net VAT to be paid to or reclaimed from HMRC (difference between boxes 3 and 4).
  • Total value of sales and other outputs, excluding VAT.
  • Total value of purchases and other inputs, excluding VAT.
  • Total value of all supplies of goods and related costs (excluding VAT) to other EU member states.
  • Total value of acquisitions of goods and related costs (excluding VAT) from other EU member states.

Upcoming dates in United Kingdom

United Kingdom01/04/2029
e-Invoicing
Mandatory B2B and B2G electronic invoicing for all companies.
Know more
Go to calendar

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