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E-Invoicing in the United Kingdom

Last update: 2024, September 17

Summary

B2G

Accepted, sometimes mandatory

All public entities in the UK accept e-invoices compliant with the EN 16931, but it is not mandatory for suppliers to use e-invoicing.
The only exception is for all NHS-related public entities, where the use of e-invoicing is mandatory.

B2B

Not mandatory yet.

B2B e-invoicing is currently not mandatory in the UK, but the government is currently running consultations on the topic.

What the Law Says

B2G E-Invoicing

Since 2020, public administrations are required to accept e-invoices from their suppliers, as outlined in the Public Procurement (Electronic Invoices etc.) Regulations 2019. This mandate aligns with the EU Directive 2011/55/EU, which requires e-invoices to comply with the EN 16931 standard, although the UK law does not prescribe a specific invoice format.

Additionally, the mandate does not extend to the suppliers of the public administrations, who remain free to send either electronic or non-electronic invoices.

Furthermore, B2G e-invoicing is mandatory for public entities affiliated with the National Health Services (NHS), such as hospitals. Suppliers of those public entities must submit invoices electronically via the Peppol network using the Peppol BIS 3.0 format.

All invoices must be archived for 6 years.

B2B E-Invoicing

There is no B2B e-invoicing mandate in the United Kingdom, but there could be one in the future, as the government will be running consultations on the topic in 2025.

In the meantime, businesses can transmit B2B invoices in the following ways:

Paper-based invoices
PDF invoices with e-signature or complete audit trail
EDI, for example via the Peppol network

All invoices must be archived for 6 years.

Timeline

B2G mandatory acceptance at central level

UK central contracting authorities must be able to receive e-invoices from their suppliers.

B2G mandatory acceptance

All public administrations in the UK must be able to receive e-invoices from their suppliers.

B2G mandatory for the NHS

B2G e-invoicing is mandatory for all public entities related to the National Health Services (NHS).

May 2019

April 2020

June 2022

Technical Details

B2G General Situation

E-invoicing is possible for B2G transactions in the UK, and all public administrations accept invoices compliant with the EN 16931. However, the government has not imposed a mandatory format, giving suppliers the flexibility to choose the syntax that best fits their needs when invoicing public entities.

National Health Services - E-Invoicing via the Peppol Network (Mandatory)

In 2019, the National Health Service (NHS) transitioned its entire supply chain to the Peppol network. This change aligns with the NHS e-procurement strategy established by the UK government in 2014.

E-invoicing then became mandatory in June 2022 and applies to all suppliers of any public entity associated with the NHS, including hospitals across the country.

As a result, these public administrations are now using Peppol for issuing orders to suppliers, who in turn are required to submit various documents throughout the process, such as logistics documents (despatch advices, advanced shipping notes) and invoices.

Specifically, all NHS suppliers must submit their invoices through the Peppol network using the Peppol BIS 3.0 format.

B2G in Scotland - PECOS P2P Platform

The B2G e-invoicing regulations in Scotland are consistent with those in the rest of the UK: public entities can accept EN16931-compliant invoices, but no specific invoice format has been mandated.

To facilitate business transactions, the Scottish government has introduced a central platform called PECOS P2P, which manages the entire procurement process for public entities that choose to use it. However, its use is not compulsory, and entities are free to use other solutions.

Although the PECOS P2P platform can process electronic invoices, this doesn’t appear to be actively promoted. Instead, suppliers are generally advised to submit PDF invoices, which public entities then manually input into the platform, effectively undermining the advantages of e-invoicing.

It seems however possible to establish point-to-point EDI connections between suppliers and PECOS to exchange e-invoices, but since no standard format is specified, each supplier likely needs to agree on a format with both PECOS and the public entity, a somewhat outdated approach to e-invoicing.

The Invoicing Hub Word

United Kingdom

E-invoicing in the UK initially made significant progress with the adoption of the Peppol network by the NHS and the mandatory acceptance of EN 16931-compliant invoices by public administrations.

However, since the advent of Brexit, progress in expanding e-invoicing initiatives has stalled. Indeed, the UK’s departure from the EU has exempted it from the obligation to apply the Directive 2014/55/EU and implement a B2G e-invoicing mandate.

As a result, there have been no recent plans to introduce mandatory e-invoicing for B2G transactions or a B2B e-invoicing mandate. This stagnation has somewhat reduced the benefits of early adoption and could position the UK as a laggard in e-invoicing.

Consequently, the government may miss out on crucial advantages such as VAT fraud prevention and access to real-time economic data, while companies could also miss out on benefits like improved processing times, reduced errors, and overall time and cost savings.

Additional Resources

HM Revenue & Customs

Tax authority in charge of e-invoicing in the UK

National Health Services

Public entity mandating the use of e-invoicing for its suppliers in the UK

PECOS B2G platform

B2G platform available to Scottish public entities

PECOS B2G platform documentation

Guidelines for the use of the PECOS B2G platform in Scotland

Peppol BIS 3.0 specifications

Entire set of official Peppol BIS 3.0 specifications

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