Online sellers: e-invoicing in 2029 starts with your bills

From 1 April 2029, under the government's plans, every VAT invoice passed between two VAT-registered businesses in the UK will have to be an e-invoice, unless an exemption applies: structured data sent from one accounting system to another, rather than a PDF. The government published its roadmap for e-invoicing alongside the Budget on 28 October. For an online shop that sells to the public, the part that matters most is the post coming in.

Sales to shoppers are out

A VAT invoice is only required when you sell to another VAT-registered business. Shoppers buying for themselves on Amazon, eBay, Etsy or your own site do not need one, so the roadmap leaves those sales out. The requirement covers VAT invoices between VAT-registered businesses within the UK. If you are not registered for VAT, none of this applies to you, although you can use e-invoices if you want to.

Sellers who also sell to trade are different. A wholesale order to a VAT-registered shop needs a VAT invoice, and from April 2029 that invoice must go as an e-invoice.

Your suppliers' bills are in

The roadmap says VAT-registered businesses "will need to be able to receive e-invoices from 1 April 2029". That covers the VAT invoices you get from UK suppliers who are registered for VAT: a wholesaler, a packaging firm, a fulfilment warehouse. To reclaim the VAT on what you buy, you need valid VAT invoices.

Illustration, not a real client. A homeware seller in Wembley buys £12,000 of stock a quarter from a UK wholesaler, plus £2,400 of VAT. She reclaims that £2,400 on her VAT return, which is £9,600 a year from this one supplier, and she needs the supplier's VAT invoice to back each claim. From April 2029 that invoice is due to arrive as an e-invoice, and the government has chosen Peppol as the network for exchanging them. If her software cannot take e-invoices in, she needs that sorted before April 2029.

The dates

• Spring 2027: a public consultation on the technical standards.

• October 2027 to April 2028: the full requirements confirmed, including any exemptions.

• By April 2028: updated VAT guidance, and how to apply for an exemption, for example if you cannot use digital tools.

• 1 April 2029: the requirement is due to start.

The power to require e-invoices is due in the Finance Bill 2026-27, so it is not yet law. The detail will follow in regulations, so expect some of it to move before 2029.

What to do now

Ask your accounting software provider whether it will send and receive e-invoices through Peppol, and at what cost. The roadmap says several providers have committed to including it in their core package at no extra cost. Our guide to what Peppol is and which invoices are caught covers the detail, and how we handle VAT for online sellers covers the rest. Nothing is required before April 2029, so there is time to do this calmly.

About the author

Harvey Dhillon is Founder and CEO of Zmartly, an accountancy firm for ecommerce sellers. He grew up in West London and began his career in finance at Barclays, in investment banking and wealth management, before going full-time on Zmartly in 2020.

Featured photo by Mikhail Nilov on Pexels.