Last checked 18 October 2026 · by the PaySorted team
In short: mandatory e-invoicing is planned from 1 April 2029 for VAT invoices to other businesses and the public sector. Invoices will need to be structured data sent over the Peppol network, so a PDF or paper invoice won't count. There's no real-time reporting to HMRC planned at the start. It still needs legislation, and the UK technical standard and any phasing for smaller businesses are expected with this year's Autumn Budget on 28 October 2026.
Using PaySorted? Don't panic. There's nothing you need to do yet. The first time you invoice a customer, PaySorted asks whether they're a homeowner, a business or a public body. From then on it picks the right kind of invoice for you every time: a normal invoice for homeowners, and an e-invoice for businesses and the public sector. We're building PaySorted to be ready well before April 2029, and the app will update itself as the final rules are published.
What's changing
At last year's Autumn Budget (26 November 2025), the Government confirmed that e-invoicing will be mandatory for all VAT invoices from April 2029. It covers business-to-business (B2B) invoices and business-to-government (B2G) invoices, such as work for councils, schools and the NHS. It still needs Parliament's approval, and HMRC and the Department for Business and Trade are working out the details with businesses and software makers.
It's one of the biggest changes to UK VAT invoicing in decades, and it sits alongside Making Tax Digital as part of the move to a fully digital tax system.
Not sure if it applies to you? Use our free e-invoicing checker (three questions). Been sent an e-invoice file? Open it with our free e-invoice viewer.
Who it applies to
| You are… | Invoicing… | E-invoice needed from April 2029? |
|---|---|---|
| VAT registered | Another business (a builder, letting agent, Ltd company) | Expected to (smaller businesses may be phased in later) |
| VAT registered | The public sector (council, school, NHS trust) | Expected to |
| VAT registered | A homeowner or private customer | No |
| Not VAT registered | Anyone | Not expected to, but check the final rules |
It applies to sole traders, partnerships and limited companies alike. What matters is whether you're VAT registered, not how your business is set up. If you're close to the VAT threshold, see do I need to register for VAT?
Why a PDF invoice won't count
Most "electronic invoices" today are PDFs sent by email. Under the mandate, an e-invoice is a structured data file (usually XML) that your customer's accounting software reads automatically, with no retyping. A PDF, a photo or a paper invoice is for people to read; an e-invoice is for software to read.
The aim is fewer mistakes, faster payment and a smaller VAT gap. The Government expects e-invoicing to cut the time and cost of handling invoices and to help reduce late payment.
What Peppol is
On 23 June 2026, HMRC's Tax Update confirmed Peppol as the core network for UK e-invoicing. Peppol (Pan-European Public Procurement Online) is an international network already used across Europe, Australia, New Zealand and Singapore, and by the NHS for purchasing.
- Decentralised ("four-corner") model: your software hands the invoice to an accredited Peppol access point, which delivers it to your customer's access point and software. You don't connect to anything yourself.
- The format is expected to be based on Peppol BIS Billing 3.0 and the European standard EN 16931. HMRC hasn't yet published the final UK specification.
- No real-time reporting to HMRC at launch. HMRC may look at this in a later phase.
Timeline
| When | What happens |
|---|---|
| February to May 2025 | HMRC and the Department for Business and Trade consult on e-invoicing |
| 26 November 2025 | Autumn Budget 2025 confirms mandatory e-invoicing for all VAT invoices from April 2029 |
| January 2026 | Co-design with businesses and software makers begins |
| 23 June 2026 | Peppol confirmed as the UK e-invoicing network |
| 28 October 2026 | Autumn Budget 2026: implementation roadmap expected, covering the UK data standard, access point accreditation and support for small businesses |
| 2027 to 2028 | Software gets ready, technical details finalised |
| 1 April 2029 | E-invoicing becomes mandatory for VAT invoices (B2B and B2G) |
We'll update this page when the roadmap is published.
What an e-invoice needs
An e-invoice carries the same information as a normal VAT invoice, but each item has its own field instead of sitting somewhere on a page. Under Peppol BIS 3.0 that means:
- Your business name, address, postcode and VAT number, plus your company number if you're a Ltd company
- Your customer's registered name and address, and their VAT number if they have one
- An invoice number, issue date, due date and the date of supply (tax point) if it's different
- A buyer reference or purchase order number: public sector customers won't accept an invoice without one
- For each line: description, quantity, unit (hours, days, each, m²), price and VAT category: standard 20%, reduced 5%, zero-rated, exempt or reverse charge
- VAT totals for each rate, and your bank details for payment
- Credit notes linked to the invoice they correct
What it means for trades
- Builders and CIS subcontractors: the VAT domestic reverse charge becomes its own category on the e-invoice, so your customer's VAT number must be right. CIS deductions are still shown as a note while HMRC confirms how they'll appear.
- Work for councils, schools, housing associations and the NHS: you'll need their buyer reference or PO number on every invoice.
- Letting agents and commercial customers: they'll expect your invoices to arrive straight into Xero, QuickBooks, Sage or their own systems.
- Homeowners: nothing changes. Keep sending invoices the way you do now.
- Getting paid: e-invoices can't get lost in an inbox, and they reach the person who pays them faster.
How to get ready: a checklist
- Check whether it applies to you: are you VAT registered, and do you invoice businesses or the public sector?
- Stop using Word, Excel or paper for invoices. You'll need e-invoicing software that connects to Peppol.
- Tidy your customer records: full registered names, addresses with postcodes and VAT numbers for every business customer.
- Ask public sector customers for their buyer reference or purchase order process now.
- Get your VAT rates right on each line, including reverse charge, zero-rated and exempt items.
- Talk to your accountant about how e-invoicing fits with your bookkeeping, VAT returns and Making Tax Digital.
- Watch for the roadmap at the Autumn Budget on 28 October 2026 and any phasing for small businesses.
How PaySorted handles e-invoicing
PaySorted can already create e-invoice files based on Peppol BIS Billing 3.0 (EN 16931), and we'll update them to the UK standard once HMRC publishes it. Today it:
- Asks once whether a customer is a homeowner, a business or a public body, then picks the right kind of invoice for you
- Makes a Peppol BIS Billing 3.0 e-invoice (XML) for any invoice or credit note, ready for your customer's or accountant's software
- Shows which details are missing from your business and customer records, so every e-invoice is complete
- Handles 20%, 5%, zero-rated, exempt and reverse charge lines, and units like hours and days
- Buyer reference and PO number fields for public sector work
- Stores your customers' registered names, company numbers and VAT numbers
- Includes every e-invoice in your records download for your accountant
- Syncs with Xero, QuickBooks, FreeAgent and Sage, and chases unpaid invoices automatically
We plan to switch on sending e-invoices straight into your customers' software through an accredited Peppol access point before the April 2029 deadline, and we don't plan to charge extra for it on any plan.
General information based on Government announcements and HMRC guidance (checked 18 October 2026), not tax advice. The final rules haven't been published yet. Check GOV.UK or speak to your accountant about your own situation.
Common questions
When does e-invoicing become mandatory in the UK?
The Government plans that from 1 April 2029, all VAT invoices between UK businesses, and from businesses to the public sector, must be sent as e-invoices. The Government announced this at the Autumn Budget in November 2025, and it still needs Parliament's approval.
Does e-invoicing apply to sole traders?
It's tied to VAT, not to your business type. If you're a VAT-registered sole trader invoicing other businesses, it's expected to apply to you. If you're not VAT registered, it's not expected to apply, though the final rules are still to be published.
Is a PDF invoice an e-invoice?
No. A PDF, a scanned invoice or a paper invoice is not an e-invoice. An e-invoice is structured data that the customer's accounting software can read automatically, sent through an approved network.
What is Peppol?
Peppol is an international network that lets different accounting systems swap invoices safely. HMRC confirmed in June 2026 that Peppol will be the core network for UK e-invoicing. The likely format is Peppol BIS Billing 3.0, built on the European standard EN 16931.
Do I need e-invoices for homeowners and other private customers?
No. The mandate covers invoices to businesses and the public sector. Invoices to homeowners and other private customers are not included.
Will HMRC see every invoice in real time?
Not at the start. The Government has said there will be no real-time reporting to HMRC when the mandate begins in 2029, though it may look at this later.
Does e-invoicing replace Making Tax Digital?
No. Making Tax Digital is about sending your figures to HMRC. E-invoicing is about how invoices travel between you and your customers. They work side by side, and both mean keeping your records digitally.
Does PaySorted do e-invoicing?
We're building for it. PaySorted already creates Peppol BIS 3.0 e-invoice files for invoices and credit notes, including VAT reverse charge, exempt and zero-rated lines. It asks once whether each customer is a homeowner or a business and picks the right kind of invoice for you. We plan to switch on sending e-invoices straight into your customer's software before the 2029 deadline, and we don't plan to charge extra for it.