E-invoicing is coming – but what does that actually mean for your business? E-invoicing is going to become mandatory for all UK VAT invoices from April 2029. Now, 2029 might sound comfortably far away. And no, I’m certainly not suggesting businesses need to start ripping out their accounting systems tomorrow. But this is one of those changes where understanding what’s coming – and making sure your current processes aren’t going to cause problems later – is probably rather sensible. Particularly because e-invoicing isn’t simply about emailing invoices instead of putting them in the post. A PDF isn’t an e-invoice This is probably the first important distinction. Lots of businesses already consider their invoicing to be digital. They raise an invoice in their accounting software, turn it into a PDF and email it to the customer. But that isn’t what HMRC means by e-invoicing. An e-invoice involves invoice data being exchanged digitally and directly between the supplier’s and customer’s finance systems, even where they use different software. Rather than somebody receiving a PDF and then checking, coding, approving or entering the information, the structured data can feed directly into their system. That includes things such as supplier details, VAT numbers, invoice dates, tax points, purchase order references, VAT rates and payment terms. In other words, the invoice doesn’t just look digital. The information behind it is digital too. So, what’s actually changing? The government has confirmed that e-invoicing will become mandatory for all VAT invoices from April 2029. That generally means business-to-business and business-to-government transactions where VAT is due, rather than your normal business-to-consumer retail transactions. We don’t yet have all the detail. HMRC and the Department for Business and Trade are due to publish an implementation roadmap at Budget 2026, which should give us more information about the timetable, staging, standards and practical requirements. We do know, however, that Peppol has been announced as the UK’s core interoperability network for e-invoicing. So the direction of travel is becoming considerably clearer. Another step towards digital tax This shouldn’t really come as a huge surprise. VAT-registered businesses are already required to maintain digital VAT records and submit their returns through Making Tax Digital software. For 2026/27, the VAT registration threshold remains £90,000, with the deregistration threshold at £88,000. The standard VAT rate remains 20%, alongside the reduced rate of 5% and zero rate of 0%. Making Tax Digital for Income Tax has also now started for sole traders and landlords with qualifying income over £50,000 from 6 April 2026. That threshold falls to £30,000 from 6 April 2027 and £20,000 from 6 April 2028. E-invoicing is another part of that same general move towards structured digital records, more regular reporting and less manual data entry. But 2029 is ages away… True. And businesses certainly don’t need to complete an e-invoicing rollout now. But there’s a fairly big gap between businesses thinking they invoice digitally and actually being ready for e-invoicing. HMRC-commissioned research found that 59% of VAT-registered SMEs surveyed were familiar with the definition of e-invoicing, but only 29% said they actually used it. PDF and email remained the most common ways of sending and receiving invoices, followed by good old-fashioned paper and post. So there’s potentially quite a bit of work to be done. And some businesses may find they need to make changes well before April 2029. Larger businesses and public sector organisations could start requiring suppliers to provide structured or Peppol-ready invoices as part of their own preparations. If one of those organisations happens to be a major customer, their timetable may suddenly become rather more important than the government’s. This isn’t really just about software There’s a temptation with anything involving the word “digital” to assume the answer is simply buying or upgrading some software. It isn’t. E-invoicing touches the whole process – sales invoices, purchase invoices, customer and supplier information, VAT coding, purchase orders, approvals, credit control and ultimately getting paid. So a useful starting point is simply to look at how invoices currently travel through your business. How are sales invoices created and checked? Are the correct customer details and VAT information held? Are purchase order numbers regularly missing? How quickly do invoices actually go out? And on the other side, how do supplier invoices arrive? Who approves them? How is the VAT checked? Are credit notes dealt with properly? Is somebody manually entering information that already exists somewhere else? Those are process questions rather than technology questions. Your data matters too Structured invoicing relies on structured – and accurate – information. Customer and supplier records therefore become rather important. Legal and trading names, addresses, VAT and company registration numbers, finance contacts, purchase order requirements, payment terms and bank details all need to be right. VAT numbers are an obvious area to pay particular attention to. At the moment, a human being can often spot that something is slightly wrong and work around it. Automated systems tend to be rather less forgiving and are more likely to reject or flag information that doesn’t meet the required format. Cleaning up that information now isn't wasted effort anyway. Good data makes your current accounting processes better too. And then there’s cashflow This is perhaps where e-invoicing becomes more interesting than simply another compliance exercise. Late payment remains a huge problem for UK businesses. The government’s late payment response estimated that late payments cost the UK economy almost £11 billion each year, with around 14,000 businesses closing annually as a result. At any given time, businesses are estimated to be owed around £26 billion in late payments. E-invoicing obviously isn’t going to magically make a customer who doesn’t want to pay suddenly reach for their bank card. But it can remove some of the excuses and delays. Missing purchase order numbers, incorrect information, invoices sitting waiting to be entered onto a system and unclear approval processes can all delay payment. If businesses use the move to e-invoicing as an opportunity to improve those processes, there could be a genuine commercial benefit alongside the compliance one. What should businesses do now? For most businesses, I wouldn't be recommending dramatic changes at this stage. But I would be asking a few questions. Does your current accounting software support structured e-invoicing, or is it planning to? What about Peppol? Does it handle purchase orders, approvals and credit notes properly? Does it integrate with the other systems you use? And perhaps more importantly, where are the manual bits in your current process? Spreadsheets, PDFs, paper invoices, email approvals and manually rekeying information aren't necessarily problems today. But knowing where you rely on them gives you a much better idea of what may eventually need to change. It's also worth looking at your larger customers, public sector customers and overseas customers. They may well start introducing their own e-invoicing requirements before the UK deadline arrives. And don't forget purchase invoices. Receiving structured supplier invoices can reduce manual entry, improve VAT coding, speed up approvals and give businesses better visibility over what they owe. So this isn't only about how you send invoices to customers. What happens next? The next important milestone will be the Budget 2026 roadmap. That should tell us more about the detailed timetable, whether there will be any phasing by business size or transaction type, Peppol and technical requirements, transitional arrangements, legacy software and the support available to smaller businesses. The government has already said it will continue talking to stakeholders about older systems that can't interoperate with the future system. That could be particularly important for businesses using bespoke, older or sector-specific software. Once we have the roadmap, businesses should be in a much better position to work out what – if anything – they actually need to change. For now, don't panic – but don't ignore it either April 2029 is still some way off. There's no need to rush into changing perfectly good software or completely redesigning your invoicing process simply because e-invoicing is coming. But there is an opportunity here. Businesses can use the next couple of years to tidy their customer and supplier data, understand where manual work exists, talk to their software providers and improve the processes around invoicing and payment.  Then, when the detailed requirements become clearer, they'll be making planned decisions rather than hurried ones. And if the end result is less admin, fewer invoice errors, quicker approvals and better cashflow, e-invoicing might turn out to be more than simply another HMRC compliance requirement.

Millions of homeowners could see their mortgage repayments increase over the next few years, according to the latest forecasts from the Bank of England. Its latest Financial Stability Report suggests that more than 5 million homeowners are expected to face higher monthly repayments by the end of 2028 . That's one million more than the Bank predicted in December, with the change linked to the economic impact of the Iran conflict and higher energy prices. What could this mean for borrowers? The good news is that, for many people, the increases are expected to be more modest than those seen over the past couple of years. The Bank estimates that a typical homeowner coming to the end of a fixed-rate mortgage over the next two years will pay around £45 more per month . That compares with borrowers who refinanced between late 2022 and the end of 2024, when average repayments increased by around £120 per month . However, not everyone will see only a small increase. Around 750,000 homeowners currently paying mortgage rates below 3% are due to come off those deals this year. For this group, the Bank expects repayments to rise by an average of £170 per month . Why have expectations changed? Before the recent conflict involving Iran, the outlook had been more positive. More than 2 million borrowers with two-year fixed-rate mortgages ending before the close of 2028 had been expected to remortgage at similar rates, with some even seeing their monthly repayments fall. That picture has now changed. The conflict pushed up oil and gas prices after the closure of the Strait of Hormuz, increasing concerns about inflation and reducing expectations of further interest rate cuts. Mortgage lenders have reflected those higher funding costs in the rates they offer borrowers. Most homeowners are protected... for now More than eight in ten mortgage holders are currently on fixed-rate deals, typically lasting two or five years. That means their monthly repayments won't change until their current deal comes to an end. The challenge comes when it's time to remortgage. For some households, even a relatively modest increase in monthly repayments can make a noticeable difference to the household budget. A practical view No one can predict exactly where mortgage rates will be in the next year or two, but this is a reminder that borrowing costs can change quickly when wider economic events unfold. If your fixed-rate mortgage is due to end over the next 12 to 18 months, it's worth reviewing your finances early rather than waiting until the last minute. Having time to understand your options can make budgeting much easier if repayments are likely to increase. Final thought The latest forecasts suggest that mortgage costs are likely to remain under pressure for many homeowners over the coming years. While the increases are expected to be less severe than those experienced during the recent interest rate rises, they could still have a meaningful impact on household finances. Planning ahead, reviewing your budget and understanding your options before your current deal expires can help avoid unnecessary surprises. If you'd like to discuss how rising mortgage costs fit into your wider financial plans, feel free to get in touch.