Future of Invoicing in the UK: E-Invoicing and MTD
UK invoicing at a glance
A PDF invoice is still a valid VAT invoice in the UK today. That changes in 2029, when e-invoicing becomes mandatory for VAT invoices. Before then, Making Tax Digital reaches more sole traders and landlords.
Date |
What changes |
Who it affects |
|---|---|---|
6 April 2026 |
Making Tax Digital for Income Tax starts |
Sole traders and landlords with qualifying income over £50,000 |
6 April 2027 |
MTD for Income Tax extended |
Qualifying income over £30,000 |
6 April 2028 |
MTD for Income Tax extended |
Qualifying income over £20,000 |
April 2029 |
Mandatory e-invoicing for VAT invoices |
VAT-registered businesses (B2B and B2G) |
PDF invoice vs. e-invoice
PDF invoice: a document for people. Someone reads it and keys the data into their accounts.
E-invoice: a structured data file that the customer's software reads on its own, with no retyping.
Under the 2029 mandate, a PDF sent by email will not count as an e-invoice, even though it is digital.
Mandatory e-invoicing from April 2029
The government confirmed at Budget 2025 that all VAT invoices must be issued as e-invoices from 2029. What we know so far:
Scope: VAT invoices between businesses (B2B) and to the public sector (B2G). Sales to consumers are outside the mandate.
Network: in June 2026 the government confirmed Peppol as the core network. Invoices travel between certified service providers, not through a government portal.
No real-time reporting at launch: HMRC will not receive invoice data live in 2029. It may follow later.
Roadmap: the detailed timetable and technical rules are due at Budget 2026.
The mandate follows VAT registration. If you are close to the threshold, our guide to VAT registration and the £90,000 threshold explains when registration becomes compulsory.
Two businesses in 2029
A VAT-registered web designer invoices a client company: the invoice must be an e-invoice.
A hairdresser who is not VAT-registered and serves the public does not issue VAT invoices, so the mandate does not apply.
Details still to come
Formats, phasing and any exemptions will be set out in the Budget 2026 roadmap. Treat April 2029 as the planning date.
Making Tax Digital: the step before
Making Tax Digital already applies to VAT: every VAT-registered business keeps digital records and files through compatible software, as described in our guide on how to file and pay your VAT return.
For Income Tax, MTD started on 6 April 2026:
Who: sole traders and landlords with self-employment or property income.
What: digital records, compatible software and quarterly updates to HMRC.
Thresholds: qualifying income over £50,000 from April 2026, over £30,000 from April 2027 and over £20,000 from April 2028.
Check your qualifying income
Qualifying income is your gross self-employment and property income, before expenses. Many people cross the £30,000 line sooner than they expect.
How to prepare: 5 steps
Check your status: are you VAT-registered, and what is your qualifying income for MTD?
Invoice with software, not a word processor. Clean, consistent data is easier to move into e-invoicing later.
Keep customer details accurate: legal names, addresses and VAT numbers.
Ask your accountant how they will receive and process e-invoices from 2029.
Watch for the Budget 2026 roadmap and plan your switch well before April 2029.
Start with your biggest customers
Large companies and public bodies are likely to move first. Ask them early how they want to receive invoices.
FAQ:
Is e-invoicing mandatory in the UK?
Not yet. The government has confirmed that all VAT invoices must be issued as e-invoices from April 2029, covering B2B and B2G transactions. Until then, paper and PDF VAT invoices remain valid.
Will a PDF invoice still be accepted after 2029?
Not as a VAT invoice between businesses or to the public sector. From April 2029 these must be structured e-invoices. Invoices or receipts for consumers are outside the mandate.
Which network will UK e-invoicing use?
In June 2026 the government confirmed Peppol as the core network. Businesses will exchange e-invoices through certified service providers rather than a government portal.
Who needs to use Making Tax Digital for Income Tax?
Sole traders and landlords with qualifying income over £50,000 from 6 April 2026, over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028.
Does e-invoicing affect businesses below the VAT threshold?
The mandate covers VAT invoices. A business that is not VAT-registered does not issue VAT invoices, but it may still receive e-invoices from VAT-registered suppliers.
