2029 UK B2B Mandate: My 7 Thoughts
First, a quick note – these thoughts are organic and are born out of the wonderful soup of wisdom and foresight that is shared in this close e-invoicing community. It’s a village. We all further our knowledge as we tread together deeper into very exciting and challenging terrain. So I say these are “My 7 Thoughts,” but most have been inspired by great pals.
The BIG News: The UK is committing to mandating B2B electronic invoicing in April 2029. A solid announcement regarding the plan will be shared November 2026.
7 Thoughts:
1 - 2029 feels “right.” 2028 would have been a bit aggressive, and 2030 too late. The UK does not need to align with the EU’s ViDA initiative, of course, but coming in at the tail end of ViDA (2030) may feel a bit too late for the UK. Given that the EC thinks businesses across the 27 countries will save €41 billion in 10 years because of ViDA, (= approx. €400K a day per country)*, the UK is right to “get on with it.” The UK does not want to drop behind, from a competitive standpoint. With fraud increasing, and the whole of the EU moving to mandatory e-invoicing, the UK does not want to be the lame duck, attracting a disproportionate amount of fraudulent activity because processes so obviously are less secure.
2 - The VAT Gap in the UK is pretty big – £9.5 billion as of ‘23/24 (up £1.5 billion in 12 months). Given the track record of early adopter countries (Mexico and Chile), the UK could see a 50% gap-reduction through its e-invoicing deployment. We need this! With our ageing population and decreasing work force, the UK Government needs to bolster the coffers long-term.
3 - The UK has a warm start as a) it already uses Peppol (for B2G transactions in the NHS), and b) businesses have been pretty good at adopting voluntary e-invoicing. The NHS is the Peppol Authority in the UK. Under the 2029 B2B mandate, it’s likely the HMRC or Department for Business and Trade will become a Peppol Authority. Change Management will be a massive part of this program, but most businesses will have had a taste of e-invoicing, and “get it.”
4 - The UK will possibly commit to a 4-corner Decentralized model, much like Belgium (though Belgium will pivot to become a 5-corner model in 2028). This means Suppliers (Corner 1) and Buyers (Corner 4) will have to work with Certified/Accredited Service Providers to become corners 2 and 3. This interoperability framework will likely be enabled by Peppol. This is in stark contract with the 3-corner voluntary model where Buyers (Corner 3) would force Suppliers (Corner 1) to use their chosen Service Provide/Network (Corner 2). The 4-corner model is essential to scale, and makes e-invoicing accessible to all. Suppliers and buyers get to choose their network. Buyers can no longer dictate what a Supplier should use. This is a HUGE relief for Suppliers. Service Providers must now cater to Accounts Receivable needs as well as Accounts Payable needs if they haven’t already.
5 - Some countries across Europe are jumping straight into e-reporting at the same time as e-invoicing, like France and Greece. It looks like the UK will wait to introduce e-reporting to reduce complexity for taxpayers in the short term. When it does, it will introduce Near Time Reporting as opposed to Pre Clearance or Real Time Reporting. Near Time Reporting is less burdensome for Governments to run and fits with the UK’s political stance.
6 - Unlike Belgium, which has a Big Bang go-live starting January 1st 2026, the UK will likely phase the rollout across all VAT-registered taxpayers based on revenue and starting with the larger taxpayers. By April 2029, the first wave will need to be live. Many countries applying mandates have two bands – large and the rest, and most countries have around 6 to 12 months between the go-lives. Countries look for a balance of Securing the Gains + Not Stress-Testing the Users. 6 to 12 months between waves should give smaller companies enough time to prepare. Plus, Small to Medium-Sized Businesses will benefit from prompter payment (Buyers aren’t mandated to pay sooner, but electronic receipt of invoice generally leads to prompter payment and better cashflow for the supplier). This dovetails in nicely with the UK Government’s Time to Pay initiative.
7 - Who should jump on this now? Because of ViDA, Mid to Enterprise companies should have already started on this journey. If ViDA doesn’t affect you, and you’re a Mid to Enterprise company, jump on this now because selecting the “right” service provider and readying your business for the first live transaction will take a year. When the 2029 Mandate happens, ideally, you’ve front-loaded the effort, and during go-live there will low/no disruption. SMBs and Micro Businesses might take longer to onboard, but solutions may well be a) free and b) integrated into accounting tools like Xero and QuickBooks. But don’t rush. Give yourself time. There’s a lot to get wrong. It’s a massive change management program. There are 2.72 million VAT-registered companies in the UK today. You don’t want to be the last one in the queue to go live because you left it too late. We don’t know what the fines will be like for non-compliance – probably not as aggressive as Croatia, or Belgium, but probably not nothing!
ACKNOWLEDGEMENTS: I love this industry. I’ve been in e-invoicing since 2002 when I joined OB10 (later Tungsten Network and then Tungsten Automation). The pals I made there, I still work with today (Matt Hammond, Didier Lombard, Steve Standring, Alec Holmes, Billy Hayden, Thomas Anderson, Patrick Schuller, Ruud Van Hilten, Fiona Leahy, and others). We all knew back then how hard it was to sell the idea of e-invoicing! Every deal felt heroic! And now!? We all welcome the mandates. These 7 Thoughts are organic and based on many discussions with many fantastic personalities in the industry, like those listed above and other new buddies, especially Liz Barclay, Phil Bailey, Ellen Leith.