We are sharing this update from ACCA, our professional body, for the interest of clients and contacts. The content is (c) ACCA
The UK will introduce mandatory e-invoicing for all VAT invoices from 2029
Budget 2025 announced all VAT invoices must be issued as an e-invoice from 2029. The mandatory requirement for all VAT transactions from 1 April 2029 will apply for business to business (B2B) and business to government (B2G) transactions where VAT is due (though not for business to customer transactions).
E-invoicing refers to the direct digital exchange of invoice data directly between buyers’ and suppliers’ financial systems in an industry-recognised standardised format. Invoices in PDF or word formats, images such as JPEG, HTML invoices on a webpage or in an email, OCR or images sent via a fax machine are not considered e-invoices for the purpose of this measure. The e-invoicing process enables invoices to be automatically integrated into the buyer’s system, reducing the need for manual processing and improving efficiency.
The announcement follows a recent consultation, which completed in May 2025. ACCA responded to the consultation advising a cautious and voluntary, phased approach.
Already mandatory in several countries, particularly in the EU, e-invoicing is available and used in the UK currently, but there is a lack of clear standards and hence a very low uptake as it is not yet mandatory. Several software providers already provide specialist e-invoicing services in the UK and more products will be coming to the market which can accommodate a wide range of business needs. Some accounting packages such as Sage and Xero already have established functionality for e-invoicing to help prepare for future mandatory requirements.
The budget announcement serves as advance notice of the coming changes to systems and will be subject to further detailed stakeholder engagement commencing in January 2026. A final decision and exact details of the new system are intended to be published at the 2026 Budget, so whilst a few years away, for now SMEs will need to watch this space for further announcements and details as matters progress.