E-invoicing digital reporting: Consultation on the future use of e-invoicing digital reporting

Question 1

Summary

Accepted Answer

Subject of this consultation

From 1 April 2029, the government will require that VAT invoices are issued as e-invoices. E-invoicing will enable invoices to be created, exchanged and processed in a standard digital format. As e-invoicing is required from April 2029, invoice data will be exchanged electronically between VAT-registered businesses in a standardised format.

The government is seeking views on how the structured data created through e-invoicing could be used to deliver benefits for businesses, HMRC and wider government. Making greater use of this data could simplify tax administration, support customers get things right earlier, reduce duplication and manual processes and improve services. In some countries, invoice data generated through e-invoicing is reported directly to the tax administration. The government is seeking views on whether there may be circumstances in which HMRC could also receive invoice data in the future to support tax administration and wider public services.

Any future digital reporting arrangements would be separate from the introduction of e-invoicing requirements from April 2029 and would require separate policy decisions. This consultation does not introduce digital reporting requirements or ask businesses or software providers to take any action in anticipation of its outcome.

For the purposes of this consultation, digital reporting means the potential sharing, provision of or access to selected e-invoice data for defined purposes. It is separate from the requirement to create, issue, and receive e-invoices and does not mean that HMRC would automatically receive every e-invoice or all the data it contains.

This consultation is separate to the ongoing work to develop the UK’s e-invoicing regime. This consultation will not impact any decisions or announcements already made in relation to e-invoicing, which will be required from April 2029.

Scope of this consultation

This consultation explores the further opportunities created by structured e-invoice data, the benefits that could be realised for businesses and government, and the evidence needed to assess whether there is a case for change. It also considers practical and technical feasibility, costs, risks and safeguards. It does not propose a preferred policy or technical model, detailed data requirements or legislative provisions.

Who should read this

businesses involved in creating or receiving VAT invoices, including small and medium-sized enterprises
accountants, tax agents and advisers
VAT and business representative bodies; software, technology and e-invoicing providers
Peppol access point providers and other intermediaries
public bodies
academics and researchers
organisations with experience of e-invoicing or digital reporting in other countries

Duration

The consultation will run for 12 weeks from 28 October 2026 to 20 January 2027.

Lead official

The lead officials are Jennifer Quinn and Warren Gordon of HM Revenue and Customs (HMRC).

How to respond or enquire about this consultation

Responses should be sent by 20 January 2027, by email to digitalreportingconsultation@hmrc.gov.uk or by completing this online survey.

Respondents do not need to answer every question and are encouraged to focus on areas where they have relevant experience or evidence.

Additional engagement and next steps

Alongside the written consultation, the government will hold targeted workshops, roundtables, technical discussions and co-creation activity with businesses, representative bodies, agents, software and e-invoicing providers, relevant sectors and public bodies. Responses to this consultation and findings from the wider engagement will inform a decision on whether there is a sufficiently strong case to develop options. If so, those options would be tested with stakeholders and may be subject to further consultation before any decisions on implementation are taken.

Question 2

Background

Accepted Answer

At Budget 2025, the government announced that VAT invoices will be required to be issued in a specified electronic format from April 2029. The government has now published its e-invoicing implementation roadmap, setting out the key steps towards implementation and providing businesses, public bodies, software providers and others with greater clarity about how the new arrangements will be developed.

E-invoicing is the exchange of structured invoice data directly between buyers’ and suppliers’ financial systems. It can support greater automation, improve data quality, reduce manual processing and errors, support faster processing and payment, and help businesses and public bodies operate more efficiently. The implementation roadmap sets out how the government will work towards these changes in a clear, proportionate and collaborative way.

The introduction of e-invoicing presents an important opportunity to explore whether the structured data it creates could unlock further benefits. Better use of e-invoice data could make it easier for businesses to get their tax right, support better and more targeted services from HMRC, improve tax administration, and create wider value across government. This consultation is about that further opportunity: how digital reporting could extend the benefits created by e-invoicing.

The data gathered through e-invoices creates a significant opportunity. Better use of structured information could reduce manual processes and requests for information, help identify errors earlier, support faster and more targeted assurance, improve compliance activity and enable greater automation. It could also create new opportunities for software providers and improve the information available to support government policy and public services. These potential benefits need to be supported by evidence. Businesses are already being asked to make an important change in moving to e-invoicing, so any further use of e-invoice data would need to demonstrate clear additional value, minimise burdens and be proportionate to the outcomes it is seeking to achieve.

That is why the government is consulting at an early stage. No decision has been taken to introduce digital reporting and the government has not developed a preferred model. We want businesses, representative bodies, agents, software and technology providers, e-invoicing providers and others to help test and shape the opportunity before detailed policy or delivery options are developed. Consultation responses will be combined with targeted engagement and feasibility work so that stakeholders are involved in defining the problems, testing the evidence and shaping potential approaches before firm decisions are taken.

Question 3

Executive summary

Accepted Answer

The e-invoicing implementation roadmap sets out how the UK will move towards the introduction of e-invoicing requirements from April 2029. As the supporting infrastructure, standards and market develop, structured invoice data will increasingly become part of normal business processes. This creates an opportunity to explore whether and how digital reporting could deliver additional benefits for businesses, HMRC and wider government.

The government wants evidence on whether appropriate access to selected e-invoice data could:

make it easier for businesses to get their tax right, including through earlier checks or prompts
reduce duplicate reporting, manual evidence gathering and separate requests for information
improve the speed and targeting of VAT repayment assurance and compliance activity
enable software and e-invoicing providers to provide more automated services to customers
support clearly defined wider public functions, where there is a credible need and appropriate aggregation, governance and safeguards

These are opportunities to explore rather than assumed benefits, and they do not amount to a proposal for a particular reporting system. The key test is whether use of particular data for a defined purpose could deliver a better outcome than existing approaches, with practical and reciprocal benefits for businesses as well as government. The consultation therefore focuses on the case for change, potential benefits, use cases, evidence, feasibility and safeguards rather than detailed reporting or access models.

Question 4

1. E-invoicing and the opportunity to go further

Accepted Answer

1.1. The e-invoicing implementation roadmap

The government will require VAT invoices to be issued in a specified electronic format from April 2029. The published implementation roadmap sets out the key decisions, products and activity needed to enable businesses and other organisations to prepare, including standards, interoperability, governance, legislation, guidance, testing and support. It provides a positive and practical route towards implementation and the foundation for structured invoice data to be exchanged consistently through normal commercial systems.

This consultation starts from that foundation and asks how the benefits of e-invoicing could be extended. For the purposes of this consultation, digital reporting means the potential future sharing, provision of or access to selected data created through e-invoicing for defined purposes. It is separate from the requirement to issue and receive e-invoices and does not mean that HMRC would automatically receive every e-invoice or all the data it contains. Any future arrangements would require separate policy, legal, technical and impact decisions.

1.2. Why government is consulting now

The design and implementation of e-invoicing provides an important opportunity to understand how its benefits could be extended before the future market and infrastructure are fixed. Consulting now allows government and stakeholders to identify the most valuable opportunities, understand what existing and emerging technology can make possible, and design out unnecessary reporting or duplication from the outset. It does not prejudge whether digital reporting should proceed.

Initial exploration with stakeholders and across HMRC points to potentially valuable applications, particularly where structured data could reduce manual activity, support customers earlier, improve assurance and create opportunities for automation. It has also highlighted questions about how those benefits could be delivered proportionately, including technology, commercial impacts, privacy, security and public trust. The purpose of this consultation is to build the evidence and shape any further exploration collaboratively.

Question 1: Where could the move to structured e-invoicing data create the greatest additional value for businesses, customers and government?

Question 2: What problems, if any, could access to selected e-invoice data help solve? Could the same outcomes be achieved more simply in another way?

Question 3: What risks, limitations or unintended consequences should be considered at this early stage?

Question 5

2. Potential use cases and benefits

Accepted Answer

2.1. Helping customers get tax right earlier

HMRC can become aware of some errors, inconsistencies or risks only after a return has been submitted. Access to timely and relevant e-invoice data might allow certain issues to be identified earlier. HMRC Assist provides an example of how better use of data could support earlier, more targeted help for customers, including prompts that help them identify and correct potential errors sooner. Software providers could also help customers review and correct information before an error becomes embedded in a VAT return. The value would depend on whether the data is sufficiently complete and reliable, whether the issue can genuinely be identified from invoice data, and whether a useful action can follow.

Question 4: Where could access to e-invoice data help businesses, software providers or HMRC identify and address errors earlier? What practical difference would this make?

Question 5: What data and level of timeliness would be needed, and who would be best placed to provide prompts or support?

2.2. VAT repayments and assurance

Businesses and agents may be asked to provide invoice data or copies of invoices to support repayments of VAT. Making relevant data available in a consistent and safeguarded form could reduce manual evidence gathering, allow assurance to be more targeted and help some legitimate claims to be resolved more quickly. However, invoice data may not provide all the context needed, and the government wants evidence to identity where it would materially change or accelerate decisions rather than simply add another information source.

Question 6: What difficulties, delays or administrative burdens arise when businesses or agents provide invoice evidence for VAT repayment assurance?

Question 7: Where could access to relevant e-invoice data improve repayment assurance, and where would further information or context still be required?

2.3. Reducing requests for information and unnecessary interventions

HMRC compliance checks can require businesses and agents to extract and share invoice information in different formats. If selected data were already available through agreed arrangements, some requests might be avoided or made easier to fulfil. Better information might also help HMRC distinguish lower-risk from higher-risk cases, reducing unnecessary interventions while focusing activity where it is most needed. These benefits need to be tested against the risk that digital reporting simply creates an additional obligation without removing existing activity.

Question 8: How could access to e-invoice data reduce or simplify requests for information and reduce unnecessary HMRC interventions?

Question 9: What existing processes, reporting or evidence requirements could realistically be removed or simplified in the VAT return?

2.4. Wider public value

Appropriately aggregated e-invoice data might support defined wider government functions, such as improving economic understanding, policy development or evaluation, or reducing duplication where businesses provide similar information to different public bodies. Any wider use would need a clear public purpose, demonstrable value and appropriate legal, security and governance arrangements and avoid creating overlapping systems, standards or reporting requirements across departments. The government is not assuming that transaction-level e-invoice data is required or appropriate for these purposes but would like to explore the opportunities the data presents.

Question 10: Where, if anywhere, could appropriately aggregated e-invoice data provide wider public value or reduce duplicated reporting to government?

Question 11: What level of detail or aggregation would be genuinely useful, and what limits should apply?

Question 12: Where, if anywhere do businesses currently face duplicate, overlapping or inconsistent information requirements from different government departments, and how could e-invoice data help simplify these?

2.5. Reciprocal benefits and impacts

Any future arrangements would need to produce clear and practical benefits for businesses as well as government. Benefits and impacts are likely to differ by business size, sector, transaction volume, VAT treatment, international activity, digital capability and existing systems. A proposition in which businesses and providers incur significant costs without clear reductions in burden, improved services or other practical value would be difficult to justify.

Question 13: What practical benefits would businesses and agents need to receive for any future arrangements to be worthwhile?

Question 14: How might benefits and impacts differ by business size, sector, VAT treatment, digital capability or existing system arrangements?

Question 6

3. Technology and practical feasibility

Accepted Answer

3.1. Using the e-invoicing infrastructure

Businesses use a wide range of invoicing, accounting, finance and enterprise resource planning systems. The adoption of Peppol, an international network for exchanging standardised electronic business documents, and other interoperable arrangements, such as Electronic Data Interchange (EDI), for e-invoicing may provide routes for government to access selected invoice data, where justified, without requiring businesses to operate separate reporting systems or re-enter information. The government wants to test whether this is technically and commercially feasible and where it might nevertheless create additional changes or costs.

Question 15: How feasible would it be to use Peppol, existing software or e-invoicing services to make selected 32a data available without creating a separate reporting process for businesses?

Question 16: What technical, operational or commercial barriers would need to be addressed?

Question 17: What experience from implementing e-invoicing or digital reporting in other countries should government consider, including impacts on businesses and tax administrations?

3.2. Existing capability and future innovation

Accounting software, enterprise systems, e-invoicing platforms, standards and networks may already hold or process relevant structured data. Capabilities are also likely to develop as the UK market prepares for the introduction of e-invoicing requirements. Government should avoid prescribing detailed requirements too early where existing or emerging technology could deliver the outcome more simply, collect less data or place less responsibility on businesses.

Question 18: What relevant capabilities already exist in software, enterprise systems, e-invoicing platforms, standards or networks?

Question 19: How could providers minimise or remove additional work for businesses, and what investment, responsibilities or commercial challenges could arise for providers?

Question 20: What emerging developments in interoperability, automation, analytics or privacy-enhancing technology should government take into account?

Question 21: What should government avoid specifying before use cases and options are better developed?

Question 7

4. Costs, risks and safeguards

Accepted Answer

4.1. Costs and operational impacts

The scale and distribution of costs would depend on the purpose, data required and approach adopted. Potential impacts could include changes to systems and processes, software development, onboarding, testing, data quality management, corrections, customer support and ongoing operation. The government needs evidence about who would bear those costs, whether existing costs or obligations could be removed, and where impacts could fall disproportionately on smaller businesses or organisations with complex or legacy systems.

Question 22: What one-off and ongoing costs or operational impacts could arise for businesses, agents, software providers, intermediaries and government?

Question 23: Where could the use of e-invoice data remove existing costs, duplication or manual processes?

Question 24: What particular issues should be considered for small businesses or organisations with complex, international or legacy systems?

4.2. Trust, privacy, security and appropriate use

Invoice data may contain commercially sensitive and other protected information. Any future use would need to be lawful, secure, proportionate and transparent, with access limited to clearly defined purposes. The safeguards required would depend on the data involved, how and when it was accessed, where it was held and whether it was used for tax administration or a permitted wider public function.

Relevant considerations include data minimisation; commercial confidentiality; security and access controls; accuracy and routes to correct errors; retention and deletion; transparency about what data is available and why; accountability for use; and effective governance and assurance. These issues must be designed into any future option rather than treated as an addition at the end.

Question 25: What privacy, security, data protection or commercial confidentiality risks should government consider?

Question 26: What safeguards, limitations, governance and assurance would be needed to maintain trust?

Question 27: What transparency and control should businesses have over what data is available, how it is used and who can access it?

Question 8

5. Co-creation and next steps

Accepted Answer

This consultation is the beginning of policy development, not the end. The government does not intend to develop detailed proposals from written responses alone. During and after the consultation it will work with businesses, small business representatives, agents, organisations representing VAT registered businesses, software and technology providers, e-invoicing and network providers, relevant sectors, public bodies and HMRC operational and analytical specialists to define the problems, test evidence and explore feasible approaches.

The government will consider consultation responses alongside targeted co-creation, technical and operational feasibility work, international experience and analysis of costs and benefits. This will inform a decision on whether there is a sufficiently strong case to develop options. If options are developed, further engagement and consultation may be required on their policy, technical, legal and delivery implications. No decision has been taken to introduce digital reporting and the outcome is not predetermined.

Question 28: Are these the right groups and issues for targeted co-creation? Who else should be involved, and what should government seek to learn from them?

Question 29: What evidence, case studies, quantitative data or practical experience should inform the next stage?

Question 9

6. Summary of consultation questions

Accepted Answer