Key takeaways
- From 1 April 2029, VAT-registered businesses and public bodies must issue and be able to receive VAT invoices as e-invoices, unless exempt.
- The UK will use Peppol, exchanging invoices through certified access points, and HMRC will become the UK Peppol Authority.
- Full requirements, including exemptions and standards, will be published between October 2027 and April 2028, giving at least 12 months' notice.
- It applies to VAT invoices between VAT-registered businesses. Sales to consumers and cross-border supplies are outside the requirement.
- A separate consultation on digital reporting of e-invoice data to HMRC runs to 20 January 2027. No decision has been made on that.
The UK’s move to mandatory e-invoicing now has a roadmap. Budget 2026 confirms that from 1 April 2029, VAT-registered businesses must issue their VAT invoices as structured e-invoices and be able to receive them, exchanged over the Peppol network. The detailed rules will be fixed by April 2028. For accountants, this is the next big digital change after Making Tax Digital, and the one most likely to change how clients’ bookkeeping works day to day.
What was announced
Budget 2025 committed to requiring VAT e-invoicing from April 2029. Budget 2026 delivers the roadmap and the law to make it happen:
- Finance Bill 2026-27 will give HMRC powers to make regulations requiring VAT invoices to be issued in a prescribed electronic format, and setting the technology, systems and networks to be used, with powers to create exemptions
- the same Bill gives HMRC the functions it needs to act as the UK Peppol Authority, a role currently held within the NHS’s supply chain body
- the requirements take effect from 1 April 2029
E-invoicing here means exchanging structured invoice data directly between the buyer’s and supplier’s systems. HMRC’s current guidance treats a PDF as an electronic invoice. Under the new regime a PDF will not be enough.
The timeline
| Period | What happens |
|---|---|
| Spring 2027 | Public technical consultation on UK e-invoicing standards |
| October 2027 to April 2028 | Government publishes the requirements: scope, exemptions, standards, guidance, business identifiers and service provider rules |
| Spring 2028 | Requirements for software providers published |
| Summer 2028 | Readiness testing with software providers |
| Winter 2028 | Infrastructure and governance operational |
| April 2028 to April 2029 | Communications campaign; businesses and software providers prepare and onboard |
| 1 April 2029 | Mandatory e-invoicing begins |
The roadmap says the government will give at least 12 months’ notice of the final requirements and does not plan to change them after April 2028 unless stakeholder feedback makes it necessary.
Who is in scope
The roadmap says e-invoices will be required for taxable transactions between VAT-registered entities where a VAT invoice is required. That includes sole traders, partnerships, charities and public bodies registered for VAT, and non-established taxable persons, who will follow the same rules as UK businesses.
Outside the requirement:
- sales to consumers, where no VAT invoice is required
- cross-border supplies, although businesses can agree to send e-invoices voluntarily
- invoices from businesses that are not VAT-registered, which can still use e-invoicing voluntarily
- digitally excluded VAT-registered persons, for whom an exemption is being designed along the lines of the MTD for VAT exemption, with details by April 2028
The government intends to use the existing VAT invoicing penalties framework as the basis for enforcement, and will set out taxpayer obligations and guidance by April 2028.
Digital reporting is a separate question
Alongside the roadmap, HMRC has opened a consultation, running until 20 January 2027, on how the structured data created by e-invoicing might be used in future, including whether it could be reported to HMRC. ICAEW notes that no decision has been taken to introduce digital reporting, which would be separate from the e-invoicing mandate.
What it means for accountants
Start with an invoicing inventory. The roadmap’s own advice for businesses is to examine current invoicing processes and speak to their accountants or advisers. Practices can map which clients invoice VAT-registered customers, which software they use and whether it already supports Peppol.
Most clients on cloud software should be fine. The roadmap expects many SMEs to get e-invoicing through the software they already use for MTD, and says several providers have committed to including it in their core package at no extra cost. Clients still invoicing from spreadsheets or word processors are the ones who need to move.
Purchase ledgers change too. Every VAT-registered business must be able to receive e-invoices, even if it rarely issues them. That affects how bills reach the books and how practices doing bookkeeping receive client data.
Expect better data. Structured invoices should cut manual entry and errors. The government also links e-invoicing to reducing late payment and invoice fraud, for example by checking bank details against those a supplier has used before.
Follow the standards consultation in spring 2027. Practices that build or recommend client systems should watch the standards and the business identifier rules, which will decide how easy onboarding is.
For other VAT changes in the Budget, see VAT changes in Budget 2026. Our guide to MTD for VAT covers the existing digital rules.
Frequently asked questions
When does VAT e-invoicing become mandatory?
From 1 April 2029, for VAT invoices between VAT-registered businesses, unless a specific exemption applies.
Does a PDF invoice count as an e-invoice?
Not under the new regime. E-invoicing means exchanging structured invoice data between systems, using Peppol as the UK’s interoperability framework. HMRC’s current guidance, which treats PDFs as electronic invoices, applies to today’s rules.
Do businesses that are not VAT-registered need to use e-invoicing?
No. The requirement applies to VAT invoices, which only VAT-registered businesses issue. Unregistered businesses can use e-invoicing voluntarily.
Will e-invoice data be reported to HMRC?
No decision has been made. HMRC is consulting until 20 January 2027 on possible future uses of e-invoice data, including digital reporting, which would be separate from the 2029 mandate.
Sources
Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance on 28 October 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.