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November 5, 2024
2024-2030

UK to publish e-invoicing consultation in early 2025

  • On 30 October 2024, the United Kingdom (UK) government confirmed that it will publish a consultation in early 2025 to establish standards for the adoption of electronic invoicing (e-invoicing) within the UK.
 

The Chancellor of the Exchequer, Rachel Reeves, delivered the UK Budget on 30 October 2024. It included an announcement about a consultation for the introduction of e-invoicing in the UK.

UK e-invoicing

The publication of the consultation will be eagerly awaited by many businesses. If the UK Government intends to create a digital value-added tax (VAT) system fit for the future, the introduction of e-invoicing is a crucial step. From a VAT digitalization perspective, the UK is not as far advanced as some other countries. The benefit of coming later to e-invoicing is that the UK can learn from the experience of other countries, tailoring the approaches that have been successful elsewhere to the UK's particular environment. Understanding and applying these learnings is expected to be a key objective of the Government consultation.

Global context

The UK announcement is just one of a series of similar measures being adopted and proposed globally. In the European Union (EU), it is the VAT in the Digital Age (ViDA) Proposals that include e-invoicing as one of the pillars. These proposals were agreed at the meeting of the Council of European Finance Ministers (ECOFIN) on 5 November 2024, where approval of the package from all 27 Member States was achieved. (For details, see EY Global Tax Alert, EU has finally reached agreement on VAT in the digital age (ViDA) proposal, dated 5 November 2024.)

Since the original ViDA announcement in December 2022, many EU Member States have introduced their own real-time reporting and e-invoicing requirements, with Belgium, France, Germany, Poland, Spain and others expected to launch requirements in the next few years. Businesses operating in the EU have therefore already had to ready themselves for the rules, including considering the data, systems, tax and commercial implications of the changes. These entities should now consider how the new UK requirements could impact their businesses.

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Ernst & Young LLP (United Kingdom) London

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor
 

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