United Kingdom: E-Invoicing Roadmap Confirms a Peppol-Based Mandate for VAT Invoices from 1 April 2029, and a Consultation Opens on Digital Reporting

KGT Country Update  |  United Kingdom  |  30 October 2026

On 28 October 2026 HM Revenue & Customs (HMRC) and the Department for Business and Trade published the "E-invoicing implementation roadmap" on GOV.UK (updated 29 October). It confirms that from 1 April 2029 VAT-registered persons, including public bodies, must issue and receive VAT invoices as e-invoices, with Peppol as the core interoperability framework.

On the same day HMRC opened a 12-week consultation, closing on 20 January 2027, on whether selected e-invoice data could in future support tax administration through digital reporting. No digital reporting obligation has been decided or proposed.

Background

The UK announced at Budget 2025 that mandatory e-invoicing for VAT invoices would apply from 2029, and announced at Tax Update Day 2026 that Peppol would be the core framework for the network.

The October 2026 roadmap sets out the timeline for the key decisions that remain, who will be affected, the implementation approach and when further guidance will be available. It is a policy and planning document: the legal obligation depends on primary legislation, introduced through Finance Bill 2026 and expected to become law in Spring 2027, followed by secondary legislation that may be completed in autumn 2028 or early 2029.

The Legislative Change

The roadmap is not itself legislation, and it operates within the existing VAT invoicing framework. It nonetheless fixes the planning assumptions that businesses and software providers must work to, and it makes the following points:

• Mandate: from 1 April 2029, VAT-registered persons, including public bodies, must issue and receive VAT invoices as e-invoices unless a specific exemption applies. An e-invoice must be structured data; PDFs, Word documents, JPEGs, HTML, email and faxed images do not count.
• Trigger: the requirement applies when a VAT-registered person makes a taxable supply to another VAT-registered person in the UK and a VAT invoice is required. Tax point, invoice content and liability rules are not changed.
• Non-established taxable persons: non-established businesses registered for UK VAT are treated the same as UK-based businesses; a UK-to-UK taxable supply by a non-established taxable person to a VAT-registered customer requires an e-invoice.
• Network: the UK will use Peppol as its core interoperability framework. Businesses typically reach Peppol through a certified Access Point, usually via their software provider, and do not need to become Access Points. The roadmap describes the flow as sender's provider, Access Point, Peppol network, recipient's Access Point and provider. It does not use the term “four-corner model” or name a specific invoice format, and states that standards will build on international standards, including those used in Peppol, with limited UK-specific additions.
• Governance: HMRC will become the UK Peppol Authority, with the timing of the transition still to be determined; the function currently sits within NHS Supply Chain. The Peppol Authority will not receive copies of business VAT invoices. Peppol Authority Specific Requirements, which may cover identifiers, security, reporting, service levels and provider accreditation, are still under consideration.
• Penalties: the government will use the existing VAT invoicing penalties framework as a basis “as far as possible”, and will then focus on how compliance is supported and administered, aiming for proportionate penalties. No penalty amounts are given.
• Exemptions: exemptions are to be tightly defined and limited. They cover digitally excluded persons, using criteria modeled on Making Tax Digital for VAT (age, health, disability, location, religious objection and lack of internet access), and technical points where existing VAT invoicing rules conflict with e-invoicing.

Scope

The mandate covers domestic transactions between VAT-registered persons where a VAT invoice is required, which includes VAT-registered public sector bodies, and extends to non-established businesses registered for UK VAT. Sales to consumers and to non-VAT-registered businesses do not require VAT invoices and so fall outside the requirement.

Exempt, zero-rated and out-of-scope transactions are also outside the requirement but can use e-invoicing voluntarily. E-invoices are not required for cross-border transactions: existing place-of-supply rules continue to apply and businesses may agree e-invoicing with overseas customers. The roadmap sets out no monetary or size-based thresholds.

Digital Reporting Consultation

At Budget 2026 the government launched a consultation on whether e-invoice data could support tax administration through digital reporting. It opened on 28 October 2026, closes at 11:59pm on 20 January 2027 and contains 29 questions on the case for change, early error identification, VAT repayments and assurance, fewer information requests, wider public value, benefits and costs for businesses, technical feasibility (including use of Peppol and existing software), and safeguards for privacy, security and governance.

HMRC states that it does not propose a preferred model or detailed data requirements, that it does not introduce digital reporting requirements, that businesses and software providers are not asked to act in anticipation of the outcome, and that it will not affect the decisions already made about the 2029 e-invoicing requirement.

Digital reporting would mean selected e-invoice data being shared or accessed for defined purposes, not HMRC automatically receiving every invoice. The consultation gives no start date or timeline for digital reporting.

Timeline

Businesses Affected

All VAT-registered businesses and public bodies that issue or receive VAT invoices for UK domestic B2B supplies, including non-established businesses with a UK VAT registration; ERP, billing and accounts payable software providers that will need to be certified Peppol Access Points or work with one; and multinational groups with UK entities that currently exchange PDF invoices.

Required Actions

• Map UK invoice flows and the systems that create, send, receive and approve VAT invoices, and identify where PDF or email invoicing is used today.
• Assess ERP and SAP readiness for structured invoices, Peppol connectivity through a certified Access Point, and the handling of business identifiers once the decision is made.
• Check whether UK VAT-registered entities, including non-established registrations, fall within the requirement for their domestic B2B supplies.
• Plan to respond to the Spring 2027 technical consultation and, if relevant, to the digital reporting consultation before it closes on 20 January 2027.
• Engage software providers on their Peppol and accreditation plans and on readiness testing planned for summer 2028.

Practical Implications

With a single start date of 1 April 2029, businesses have roughly two and a half years, but the detailed requirements are not due until between October 2027 and April 2028, with a stated intention not to change them afterwards except where stakeholder feedback makes it necessary.

Design work should therefore start from Peppol and structured-data principles, while keeping flexibility on UK-specific additions. Because digital reporting is a separate, undecided matter, companies should avoid building reporting-specific functionality in advance but should keep e-invoice data quality high, since any future reporting would rely on it.

Expected Next Steps

• Finance Bill 2026, with the legislation expected to become law in Spring 2027.
• Public technical consultation on standards and Access Point certification in Spring 2027.
• Close of the digital reporting consultation on 20 January 2027 and HMRC's response.
• Confirmation of scope, exemptions, standards, business identifiers and provider requirements between October 2027 and April 2028.
• Readiness testing with software providers in summer 2028 and accreditation ahead of 1 April 2029.

How Can KGT Support You?

KGT supports multinationals with SAP-integrated e-invoicing add-ons and SAP Document and Reporting Compliance (DRC) services. We can assess how the UK Peppol-based mandate affects your SAP billing and accounts payable processes, help you select and plan Access Point connectivity, and prepare your data and processes for the 2029 start. Contact KGT to discuss your UK readiness.

This update is for information only and is not tax or legal advice. Please consult your tax adviser before acting on it.