UK Businesses Face Growing Pressure Ahead of E-Invoicing Mandate: Basware Report

UK businesses could face mounting compliance challenges as the government moves towards introducing mandatory e-invoicing requirements, according to new analysis from software company Basware.

The findings suggest many organizations remain reliant on traditional invoicing methods, despite proposed reforms led by HMRC that would require all VAT-registered businesses to issue and receive structured electronic invoices by 2029.

According to Basware, more than half (56%) of finance leaders said compliance failures had already prevented overseas expansion for their business. The company said this pressure is expected to increase as the UK moves closer to implementing the mandate, with additional guidance anticipated following the Autumn Budget in 2026.

The proposed changes would replace PDF and paper-based invoicing systems with structured electronic invoicing. Basware’s analysis of 272 million invoices found that 57% of invoices globally are still received in PDF or paper format.

The company also cited findings from its “Beyond the Checkbox: Compliance as Strategy” research, conducted with FT Longitude among 400 global finance leaders. According to the research, 36% of businesses have incurred fines linked to incorrect tax audits, while 39% reported invoices being rejected because of tax or invoicing compliance errors.

Abigail Myers-Antiaye, VP of Global Compliance at Basware, said many businesses may be underestimating the scale of change required.

“UK businesses are significantly underestimating what this shift means, with PDF, email and paper still being widely used as a common invoicing method. Many finance teams are effectively building compliance risks into their day-to-day operations. As e-invoicing becomes mandatory, this is no longer a future concern, but a present-day readiness gap, which will directly impact operational continuity, cross-border trade, and growth opportunities if left unaddressed,” she said.

The research also highlighted visibility across invoicing processes as a challenge for finance leaders, with 91% identifying it as a major operational risk.

Respondents reported reputational damage, regulatory fines and fraudulent activity linked to invoicing or reporting failures among the most common consequences of inadequate e-invoicing processes.

“When finance teams lack visibility across the full invoice lifecycle, compliance risks multiply. E-invoicing gives organizations the control and clarity they need to reduce avoidable errors and strengthen financial governance,” Myers-Antiaye added.

Basware said businesses that adopt e-invoicing systems earlier may benefit from improved efficiency and resilience, while organizations that delay preparations could face increased compliance risks, rejected invoices and operational disruption as the proposed mandate approaches.

Read Basware's press release here

This content is intended to share insights and practical considerations based on industry experience. It does not constitute legal, regulatory, or financial advice. Regulatory requirements vary by jurisdiction and circumstance, so any compliance-related matters should be reviewed and validated with your own professional advisors.