Roll out e-invoicing gradually to support businesses, says ATT

The Government is consulting¹ on plans to standardise and increase adoption of e-invoicing, the digital exchange of invoice information directly between buyers and suppliers, which it claims can help businesses get their tax right first time, close the tax gap and save time and money.

The ATT says² that while it supports the transition, e-invoicing should remain voluntary for the time being, allowing the UK to build the right infrastructure and to learn from the challenges faced by other countries. It suggested a phased roll-out for mandatory e-invoicing, starting with larger businesses, while those below the VAT threshold of £90,000 should be exempt.

ATT President Senga Prior said:

“We support the transition to e-invoicing and recognise the potential benefits. More than 130 countries are already implementing or planning to implement e-invoicing structures, so it is essential for the UK to take action now to ensure it does not fall behind.

“We feel the UK should continue with voluntary adoption of e-invoicing, followed by a phased mandatory rollout, starting with B2G (business to government), then larger B2B (business to business) transactions, implemented over a six-year timeline.

“This will provide businesses with enough time to adapt to the changes, while also allowing the UK to learn from other countries successes and shortcomings. By considering factors like policy objectives, regulatory environments, business readiness, and government support, the UK can design a proportionate, fit-for-purpose system that delivers benefits without creating unintended burdens.”

The Association also called for clear guidance and support for businesses, learning from the challenges of another digital scheme – Making Tax Digital (MTD) for VAT.

Senga Prior added:

“To drive voluntary adoption, the Government must reduce barriers, support small businesses with low-cost solutions, and collaborate with software providers and businesses.

“Linking e-invoicing to real-time reporting to HMRC is not appropriate at this stage. The focus should be on building the core e-invoicing infrastructure. The Government should also look to publish an e-invoicing roadmap that sets out a clear long-term vision, realistic implementation timelines, and a firm commitment to delivery.

“This would give businesses and software providers the confidence to invest and plan ahead, avoiding the uncertainty and frustration seen with previous initiatives such as MTD.”

Notes:

1. Government consultation: Government sets out plans for ‘e-invoicing’ overhaul to cut paperwork.
2. ATT consultations response: Electronic invoicing: promoting e-invoicing across UK businesses and the public sector.