Electronic invoicing across UK businesses and the public sector

On 13 February 2025, HM Revenue & Customs (HMRC) and the Department for Business and Trade (DBT) launched a consultation to gather views on standardising electronic invoicing (eInvoicing) and increasing its adoption across UK businesses and the Public Sector. This marks the first time UK businesses have been invited to provide input on proposals that could revolutionise business operations, making processes more efficient, cost-effective and streamlined.
 
The consultation seeks to make the adoption of eInvoicing more accessible by reducing both setup and operational costs, ensuring that the systems are user-friendly and compatible with businesses’ existing infrastructure. One of the core focuses is on how different eInvoicing methods can integrate seamlessly with current business systems, simplifying the transition process for many businesses.
 
While the UK might be relatively late to the eInvoicing stage, many organisations already employ electronic invoicing in some capacity and the UK Government can learn from the experiences of other countries that have successfully rolled out eInvoicing systems.
 
 

A global shift to electronic invoicing

Countries around the world – France being the latest – are rolling out eInvoicing and eReporting. These efforts highlight the advantages of eInvoicing, which include:
  • Cost reduction: The process of invoicing becomes far cheaper and more efficient.
  • Dispute reduction: Fewer invoice disputes arise as the process is more transparent and automated.
  • Error elimination: The reliance on manual data entry is drastically reduced, minimising the risk of errors.
  • Environmental benefits: By reducing paper-based processes, eInvoicing contributes to a more sustainable business model.
  • Fraud prevention: Automation and standardisation make it harder for fraudulent activities to occur.
These benefits are just a few reasons why governments and businesses are making the shift to electronic invoicing, with the UK aiming to follow suit.
 

By pushing for eInvoicing, HMRC aims to boost business productivity, improve cash flow, and reduce administrative burdens. The European Union’s recent introduction of the VAT in the Digital Age (ViDA) package, which mandates eInvoicing for EU businesses over the next few years, has further underscored the importance of keeping UK businesses competitive in the global digital landscape.

HMRC’s push towards eInvoicing reflects these goals, encouraging UK businesses to adopt systems that are not only more efficient but also positioned to keep pace with international standards. The consultation lays the foundation for potential future changes, and the momentum towards eInvoicing is growing steadily.

Although the idea of standardisation is being explored, there is no firm commitment to adopting a specific eInvoicing standard at this stage. The main aim is to gather feedback on how standards could facilitate eInvoicing adoption and ensure interoperability. However, the use of the Pan-European Public Procurement Online (PEPPOL) standard in NHS procurement has been highlighted, suggesting it may be a potential standard for wider adoption.

Although the consultation doesn’t guarantee any quick changes, it signifies a critical step towards modernising the business environment in the UK. By engaging stakeholders, exploring various models, and supporting widespread adoption, HMRC aims to create a framework that is beneficial to businesses.

While there is no immediate implementation of mandatory eInvoicing, businesses should begin to consider the implications of these changes for their operations. It’s important to start planning for eInvoicing by mapping out the current invoicing journey, exploring automation improvements and keeping up to date with developments as they unfold. By doing so, businesses will be better prepared for potential future changes that could dramatically improve invoicing efficiency, reduce errors and streamline financial operations.

Although the implementation of eInvoicing might be some time away, it is crucial for organisations to recognise this as part of their broader transformation and digitalisation strategies. Understanding and adopting eInvoicing will be key to staying competitive.

The UK’s move towards electronic invoicing represents a crucial shift towards more efficient, cost-effective, and secure business processes. While the consultation remains in its early stages, its impact could be far-reaching for both businesses and the public sector. As the consultation progresses, businesses must begin preparing for the future of eInvoicing, ensuring that they remain ahead of the curve and ready for the inevitable transformation of business processes in the years to come.

Want to know more? You can download our step-by-step guide to invoice automation, and we would very much like to discuss this with you.