UK: VAT in the Digital Age (ViDA) and E-Invoicing Requirements

At the same time, the UK is accelerating its own digital VAT agenda. Historically, e‑invoicing has been permitted but optional, but following the Government’s consultation response at Budget 2025, the UK has now confirmed that mandatory e‑invoicing for all VAT invoices will apply from April 2029 as part of its wider tax modernisation programme.

HMRC have now also announced that they will be using Peppol as a third-party platform provider who will serve as the core network for e-invoicing in the UK. Peppol has been used already by a number of EU countries.

What is VIDA? 

VIDA is a major update to the EU VAT system and will materially affect the VAT compliance requirements of businesses operating in the EU. It is expected that the UK will follow closely to the EU’s updates but it will announce its own roadmap.

The EU package is built around three pillars aimed at modernising VAT compliance and reducing fraud:

• Digital reporting & e‑invoicing - From July 2030 at the latest, cross border B2B transactions will require structured e-invoicing using EU standard formats.
• Platform economy reforms - From July 2028, digital platforms will become responsible for collecting and remitting VAT on short‑term accommodation and passenger transport where the underlying supplier does not account for VAT.
• Single VAT registration - The extension of the One Stop Shop (OSS) regime and new rules on the transfer of own goods will significantly reduce the need for multiple VAT registrations across the EU. 

UK e-invoicing timeline

Impact on UK Businesses

Even outside the EU, UK companies will be significantly affected because VIDA changes apply to any business trading within the EU’s VAT jurisdiction (this could be as simple as purchasing from local EU suppliers).

The most urgent impact for most is likely to be the e‑invoicing changes, which EU Member States are beginning to introduce ahead of the 2030 VIDA deadline. These requirements are expected to increase administrative workload, and UK businesses may need access to compliant platforms and the ability to issue structured e‑invoices to continue their EU based activity.

Some elements may reduce compliance burdens, such as the extended reverse charge and the expanded OSS regime, potentially cutting the need for multiple VAT registrations.

UK businesses should also maintain awareness of the UK’s roadmap to e-invoicing which is expected to be announced ahead of the November 2026 budget.