UK Government Launches Joint Public Consultation on Standardizing E-Invoicing

On February 13, 2025, the UK Government announced that Her Majesty Revenue and Customs (HMRC) and the Department for Business and Trade had opened a joint public consultation on standardizing e-invoicing and ways to increase its adoption across the country.

The joint public consultation is part of the UK's strategy to transform and digitalize its tax system, which aims to reduce the VAT gap, ensure tax compliance, and increase budget revenue.

Purpose of the Public Consultation

The UK government is making significant progress toward introducing and implementing e-invoicing rules and regulations for businesses and the public sector. In the joint consultation, HMRC and the Department for Business and Trade seek feedback from all interested and relevant stakeholders on how different e-invoicing systems may align with their businesses.

Based on the information gathered through this public consultation, the UK government and its relevant governing bodies will continue their work on developing the country-wide e-invoicing system.

Some of the key questions raised in the public consultation refer to whether the approach to the implementation of e-invoicing should be mandatory or voluntary, to which extent the mandatory e-invoicing might be appropriate and effective for UK businesses, and if the implemented e-invoicing system should include a real-time reporting.

As stated in its consultation summary, the HMRC expects that implementing a standardized e-invoicing system will improve productivity by reducing administrative burdens and costs, improve business cash flow due to faster payments and more accurate data, and simplify tax reporting, thus reducing the tax gap by reducing errors in the reporting process.

Consultation

Businesses of all sizes, SMEs or large, other interested parties, such as representative or industry bodies and organizations, and individuals can submit their comments, suggestions, and responses to the raised questions to the HMRC by May 7, 2025.

The open consultation shows that the UK government wants to keep an open policy-making process and encourage engagement from irrelevant and interested parties to ensure smooth implementation of the e-invoicing system for B2B and B2G transactions.

Source: UK Government, HMRC