The Chancellor announced in last year’s Budget that mandatory electronic invoicing will be introduced for all VAT invoices from 2029 to reduce administration and make tax compliance easier and more accurate for businesses, how the mandate will be implemented in construction is yet to be determined.
Electronic or e?invoicing is the direct exchange of invoice information in a digital format between suppliers’ and buyers’ accounting systems. It will become mandatory for all VAT invoices, which are typically issued for business to business (B2B) and business to Government (B2G) transactions where VAT is due, and HMRC will standardise the data that must be included in a VAT e?invoice. The mandate will not impact the payment provisions within the Construction Act as it only changes the manner in which VAT invoices must be sent, not payment notices. The Construction Industry Scheme (CIS) will also not be part of the mandate as it does not fall under the VAT Act.
There will not be a central Government platform for e?invoicing and it will be up to the private sector to develop suitable products that meet the Government’s requirements once these have been confirmed.
