The UK government wants your input on the future of electronic invoicing (e-invoicing) — and now’s the time to speak up. Suppliers across the country are being invited to help shape how e-invoicing is adopted across both business and the public sector. The consultation was launched in February but there’s still time to have your say.
Respond by 7 May 2025 to ensure your views help influence a system that works for you.
Why Now? The Policy Objectives Behind the Consultation
E-invoicing is the digital exchange of invoice information directly between buyers’ and suppliers’ financial systems, even if these systems are different. The outcome is an invoice which is automatically written into the buyer’s financial system without manual processing.
E-invoicing has the potential to unlock major benefits for UK businesses: faster payments, reduced admin, fewer errors, and better tax compliance. But while many organisations already use some form of digital invoicing, the landscape is inconsistent. The government wants to address that by developing a more standardised, interoperable, and future-ready e-invoicing ecosystem.
The consultation supports broader policy goals, including:
- Simplifying and automating financial processes for both businesses and government bodies
- Reducing late payments and improving cash flow, especially for SMEs
- Enhancing tax compliance and aligning with the Making Tax Digital strategy
- Supporting interoperability and international trade by encouraging use of common data standards
This isn’t about forcing businesses into a one-size-fits-all model — it’s about creating a framework that works across sectors and technologies, and that helps businesses digitise in a way that makes sense for them.
The Role of Standards: Why They Matter
To realise the benefits of e-invoicing, the UK needs to move towards common data formats, definitions, and protocols that ensure different systems can “speak the same language.” That’s where standards like Peppol come in.
What is PEPPOL?
PEPPOL (Pan-European Public Procurement On-Line) is a widely adopted international standard that enables the secure exchange of invoices and other procurement documents. It uses a decentralised model where suppliers and buyers communicate through certified “access points.”
Already in use by the NHS and many private sector organisations, PEPPOL ensures interoperability, reduces integration costs, and helps suppliers deal with multiple buyers without needing bespoke systems for each one.
The government is particularly interested in whether expanding PEPPOL adoption (or a similar standard) could support wider e-invoicing uptake across the UK.
What Are the Options Being Explored?
When considering different models of e-invoicing, a key question is whether a model has centralised or decentralised platforms. With a centralised model, e-invoices are submitted to the tax authority before being issued to the buyer. With a decentralised model, there is no central ‘hub’ through which invoices are routed, with businesses submitting their invoices through their software providers direct to their customers.
- Centralised Model
All invoices are sent to a central platform before reaching the buyer. This gives authorities strong oversight but may increase admin for suppliers. As this model does not always improve business efficiency and is costly for tax authorities to implement, the Government have indicated they do not plan to explore this model in detail.
- Decentralised Model (4-Corner)
Suppliers and buyers use their own service providers to exchange invoices, following agreed standards. This model is more flexible and is already widely used, including by PEPPOL networks.
Real time reporting and Continuous Transaction Controls (CTC)
Both centralised and decentralised models offer the opportunity for real or near real-time reporting of transactional data to the tax authority. This data transfer could potentially be automated to support and simplify businesses tax reporting processes and improve tax compliance activity. The consultation aims to ascertain the impact of data sharing as part of a centralised or decentralised approach.
Each option has different trade-offs in terms of cost, complexity, and control. The government wants to understand what would work best for suppliers like you.
Why Your Voice Matters
Whether you’re fully digital or still using manual processes, this consultation is about building a system that supports the real-world needs of UK businesses. That includes:
- Ensuring systems are easy to adopt and cost-effective
- Supporting SMEs and supply chains
- Making compliance simpler, not harder
- Enabling cross-border trade and innovation
Now’s the time to help ensure the system developed is one that works for your business, not just the biggest players.
How to Get Involved
Respond to the consultation online or email your thoughts to: einvoicingconsultation@hmrc.gov.uk
🗓️ Deadline: 7 May 2025
