• The UK will introduce mandatory e-invoicing from 2029 using a 4-corner exchange model, with no immediate obligation to report invoice data to HMRC.
• Real-time reporting (RTR) / e-reporting is explicitly deferred (not abandoned) and could build on the same infrastructure at a later stage.
• Consultation responses broadly supported RTR in principle, but only after 2029 e-invoicing is embedded, with clear standards, strong governance, and phased implementation.

Government Response Overview

The UK government’s response to the 2025 e-invoicing consultation clarifies that HMRC will not require real-time reporting of invoice data with the 2029 mandate—for now.

However, e-reporting remains on HMRC’s strategic horizon, potentially following Belgium’s phased approach (e-invoicing first, then e-reporting).

The focus is on establishing e-invoicing for B2B and B2G transactions via a 4-corner model (invoices exchanged between supplier and buyer through service providers, without direct HMRC transmission).

This design reduces disruption, enables gradual adaptation, and avoids duplicating compliance in the initial phase—unlike clearance/CTC models in parts of the EU (e.g., Italy, ViDA 2030) and Asia.

Future RTR, if introduced, would build on this infrastructure to make reporting “as seamless as possible for businesses.” E-invoicing is positioned as foundational platform capability.

Data Governance and HMRC Transformation

HMRC acknowledges concerns over real-time data: protection, proportionality, and system resilience.

Any future RTR would require careful handling of data use, protection, storage, compliance, and service outcomes.

Future RTR steps are linked to HMRC’s Transformation Roadmap, proceeding only if aligned with modernising tax administration via joined-up, innovative systems (not standalone burdens).

No Pre-Filled VAT Returns

HMRC confirms e-invoicing data alone is insufficient for pre-populated VAT returns, due to partial exemption, adjustments, non-invoice corrections, and cross-border complexities.

The door remains open: e-invoicing data could feed into future VAT products over time (not as sole source).

Why Respondents Support Real-Time Reporting

Many respondents supported RTR in principle for B2B/B2G, viewing it as a logical digital tax evolution.

Cited benefits:

• Improved VAT compliance and fraud reduction
• Greater transparency between taxpayers and HMRC
• Simplified processes and fewer retrospective audits

RTR seen as transformational if low-friction; examples include Hungary and South Korea operating at scale without undue disruption.

Operational Efficiency and Smarter Compliance

RTR could enable:

• More accurate VAT returns and fewer corrections
• Reduced administrative burden via automation
• Targeted HMRC compliance support

Linked to broader digital finance innovation: standardised data flows ease smarter tools for accounting, tax, and cash-flow management.

Conditions and Cautions from Respondents

Support was conditional on:

• Clear technical/data standards aligned with international norms
• Robust, secure infrastructure for real-time data
• Phased rollout for adaptation by businesses and HMRC

Strong emphasis on sequencing: e-invoicing must embed in supply chains first; premature RTR risks undermining adoption.

Some raised concerns: administrative complexity, integration challenges, GDPR risks, disproportionate SME impact, HMRC readiness, costs, and limited sectoral benefits.

E-Invoicing Limitations

Respondents welcomed “smart” features (prompts, reminders, automation, AI support), especially for SMEs.

Integration with procurement and task automation seen as efficiency gains.

However, e-invoicing cannot capture:

• Partial exemption and complex VAT adjustments
• Bespoke contractual arrangements
• B2C transactions (no VAT invoices required)

This aligns with HMRC’s view: e-invoicing supports but does not replace comprehensive VAT reporting.

Outlook

The response and feedback indicate the UK will not impose e-reporting in 2029 but is laying groundwork for it.

E-invoicing is step one; real-time reporting is the likely step two.

For businesses: plan for e-invoicing now, but design systems future-proof for potential RTR. The UK moves cautiously compared to peers, but direction is clear.