HMRC has recently updated a document setting out what businesses need to be aware of when sending, receiving and storing VAT invoices in electronic format.

If you have previously or want to issue your Value Added Tax (VAT) sales invoice electronically in the future, you will need to check the invoice format against the documentation to avoid penalties.

If you receive or in the future receive VAT invoices in electronic format from suppliers, please check the correct format to avoid receiving invalid invoices. Five steps to check your e-invoice.

You may also like this article: What is Making Tax Digital?


electronic invoice

Why use the electronic invoice

We understand that more people do not want to try to change, because change always takes time to adapt.

In fact, e-invoicing has more advantages in a secure environment:

  • Structured data for easy auditing
  • Improve order traceability
  • Reduce paper costs and storage space
  • Quick search and access
  • easier to deliver

On top of that, the cost of processing paper invoices is estimated at £13.98. The fee for processing electronic invoices is £4.77. Businesses that ditch paper invoices in favor of electronic invoices can save at least 1% to 2% of their turnover.

Do I need to tell HMRC to issue an electronic invoice?
You do not need to report to HMRC that you are about to issue an electronic invoice. The only thing you need to be sure of is that the system for issuing, receiving and storing electronic invoices must meet the requirements on file.
Check the electronic invoice's content

Electronic invoices must contain the same information as paper invoices, subject to official material.

There are other additional rules to be aware of if you supply to the EU.

Check the materials required for the electronic invoice

Click the link to find the OFFICIAL documents from GOV.UK

Check the electric invoices' format

Various electronic invoice message formats are acceptable as long as the relevant invoice message used contains the required data. Examples include:

  • Traditional EDI standards such as UN/EDIFACT, EANCOM and ODETTE
  • XML-based standards
  • Comma separated ASCII, PDF

Before obtaining the customer’s consent to invoice electronically, you may want to ask the customer whether it is acceptable for you to send a specific invoice format.

Check the authenticity and integrity of the electronic invoice

You must be able to ensure the authenticity and integrity of invoice data during transmission between you and your customers.

In order to minimise the burden on the business, HMRC has not been overly prescriptive in specifying the detailed form such controls may take.

Where possible, HMRC prefers to rely on good business practice or the company’s own controls.

Check third-party vendors

Although there is a lot to check before you decide to move to e-invoicing. You need to take extra care to identify a reputable, experienced, reliable and authorised UK provider.

A third-party provider will professionally help your business successfully transition to e-invoicing.

When you see numerous proposals from third-party vendors, it is imperative to ask more questions and communicate more.


For more information you can browse HMRC official documents.