Many SMEs do not have a proper understanding of e-invoicing

New research has found a worrying gap in e-invoicing knowledge among the UK’s smaller sized businesses.

These findings are concerning, considering e-invoicing will eventually become mandatory for business-to-business (B2B) and business-to-government (B2G) transactions where VAT is due.

Confusion over e-invoicing

Recently published research from HMRC found that a significant number of respondents initially reported that they did not use e-invoicing, but then went on to describe payment practices that meet the definition.

These findings suggest widespread confusion around what constitutes e-invoicing, and as a result of this, the Association of Taxation Technicians (ATT) is calling for clearer guidance ahead of the proposed April 2029 start date of B2B and B2G e-invoicing procedures.

The ATT believes that more work must be done to educate SMEs on e-invoicing to ensure that they understand their responsibilities before the changes are brought in.

This should include more effective communication and a clear roadmap, which the government says will be published at this year’s Budget.

Considerable work to be done to ensure SMEs are adequately prepared for the e-invoicing transition

Jon Stride, chair of the ATT’s Technical Steering Group, commented, “The research raises questions about the effectiveness of HMRC’s communications around e-invoicing. Despite a campaign conducted during the research period, including an email bulletin distributed to more than 100,000 recipients, 91% of SMEs surveyed did not recall seeing any messaging about e-invoicing.

“The findings underline that there is still considerable work to be done to ensure SMEs are adequately prepared for the transition to e-invoicing. With a mandate expected to come into force in April 2029, stakeholders are increasingly calling for a clear and comprehensive roadmap, anticipated at Budget 2026, alongside more targeted and effective communications.

“Without greater clarity and engagement, there is a risk that many businesses will remain underprepared for the shift, potentially undermining the intended benefits of e-invoicing, including improved efficiency, reduced errors, and enhanced tax compliance.”

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