Last reviewed: 4 October 2026. This guide is general information, not legal advice, and not tax advice either. Dates announced by the government may change if it decides so.
TL;DR
- The government has announced that all VAT invoices must be issued as e-invoices from 2029; HMRC's July 2026 roadmap update says April 2029.
- Not decided yet: the technical standard, the transmission model, any exemptions and the legislation. A roadmap is promised at Budget 2026, and HMRC plans to publish full guidance, standards, technical specifications and legislation by the end of the 2027 to 2028 tax year.
- Already in force: Making Tax Digital for VAT for all VAT-registered businesses, and Making Tax Digital for Income Tax for sole traders above £50,000 of qualifying income since 6 April 2026.
- Announced: Making Tax Digital for Income Tax above £30,000 from April 2027 and £20,000 from April 2028.
- For a recruitment agency, the practical work today is clean invoice data: one client record, correct VAT details, invoices generated from approved timesheets rather than re-typed.
What has been announced
The government's consultation response on e-invoicing, published in November 2025, states: "as announced at Budget 2025, the UK will introduce mandatory e-invoicing for all VAT invoices from 2029". It adds that VAT invoices are "typically issued for business to business (B2B) and business to government (B2G) transactions where VAT is due", not for sales to consumers, and that the aim is for all VAT invoices "to be issued and received electronically".
HMRC's Transformation Roadmap progress update of July 2026 confirms the direction and gives a month:
- "The government will also mandate e-invoicing for all VAT invoices from April 2029."
- HMRC is working with the Department for Business and Trade to publish an e-invoicing roadmap at Budget 2026, setting out the milestones to implementation.
- HMRC "will publish full guidance, standards, technical specification and legislation by the end of 2027 to 2028".
At the date of this review, we found no published roadmap on GOV.UK. Treat April 2029 as the government's stated target, not as a date written into law.
What is still undecided
The consultation response is clear that the regime is still being designed with businesses and software providers. Open questions include:
- The standard. The government will "review the risks and benefits of adopting an existing standard or designing a UK-specific standard". Many respondents favoured the Peppol network and the EN 16931 standard already used in public procurement, but no choice has been announced.
- The transmission model. Respondents discussed four-corner and five-corner Peppol models; again, nothing is decided.
- Scope and exemptions. The mandate is described as covering "all VAT invoices". Any exemptions or simplified routes for small businesses have not been published.
- Sector specifics. The response notes that some concerns, "including self-billing and the VAT reverse charge", have been addressed in other countries' regimes. For recruitment, self-billing is relevant if you self-bill contractors' limited companies.
What already exists, according to the consultation response: bodies covered by the Procurement Act 2023 must accept e-invoices that comply with BS EN 16931, and NHS Supply Chain requires its suppliers to issue e-invoices through Peppol. If you supply staff to the public sector, you may already be asked for structured invoices.
Why recruitment agencies should care early
E-invoicing touches invoices you issue and invoices you receive:
- Client invoices. A contract desk issues one invoice per assignment per month, sometimes with expense lines. Perm desks issue fee invoices, sometimes split into instalments, and credit notes when a rebate applies. All of these are VAT invoices if you are VAT registered.
- Contractor invoices. Limited company contractors and umbrella companies that are VAT registered invoice you every month. Under a mandate covering all VAT invoices issued and received electronically, those would be e-invoices too.
- Data quality. Structured invoices expose bad data: a client's legal name that differs between your CRM and your invoices, a missing VAT number, a day rate typed by hand. Problems that a PDF hides become rejected invoices.
The government's own case for e-invoicing leans on late payment: the consultation response cites industry research linking adoption to a reduction in late payments. Our guide to late payment of invoices in the UK covers the rules that already apply.
Making Tax Digital: the deadlines that apply now
MTD for VAT
HMRC states that all VAT-registered businesses should now be signed up to Making Tax Digital for VAT, and that new VAT-registered businesses are signed up automatically unless exempt. You must keep VAT records and submit VAT returns using compatible software.
If you are not VAT registered yet, remember the threshold: registration is compulsory once taxable turnover goes over £90,000 in 12 months (GOV.UK).
MTD for Income Tax
Making Tax Digital for Income Tax applies to sole traders and landlords registered for Self Assessment whose qualifying income from self-employment or property is above a threshold:
| Qualifying income | In tax year | Must use MTD from |
|---|---|---|
| Over £50,000 | 2024 to 2025 | 6 April 2026 |
| Over £30,000 | 2025 to 2026 | 6 April 2027 |
| Over £20,000 | 2026 to 2027 | 6 April 2028 |
It means keeping digital records, sending quarterly updates and submitting the tax return through compatible software. HMRC says it will not apply penalty points for late quarterly updates during the first year (2026 to 2027) for those who had to start in April 2026. Partnerships will follow, at a date HMRC has not set yet.
This matters if you run your agency as a sole trader, and for sole-trader recruiters who work with you. A limited company agency pays Corporation Tax and is not in scope of MTD for Income Tax. Our guide to starting a recruitment agency in the UK compares the two structures.
What you can do now
Nothing in the mandate requires action before the standard is published. These steps are useful whatever standard is chosen:
- One client record per legal entity, with the registered name, address and VAT number used on every invoice.
- Invoices generated, not typed. A contract invoice should come from the approved timesheet and the day rate on the assignment; a perm invoice from the placement.
- Consistent numbering and credit notes. Every credit note linked to the invoice it corrects.
- Ask your software vendors what they plan for the UK standard once it is published, and how they will handle invoices you receive as well as those you send.
- Follow the Budget 2026 roadmap, then the HMRC guidance due by the end of 2027 to 2028.
Where Marvin stands
In Marvin, invoices are built from data you already hold. When every timesheet of the month is approved for an assignment, Cash drafts the client invoice from the approved days and the day rate, with rechargeable expenses on a separate line. When a candidate is hired, Cash drafts the placement fee invoice, which can be split into instalments. Cash tracks payments, credit notes and overdue invoices. See the full loop in our guides to timesheet software for recruitment agencies and contract and temp recruitment software.
To be clear about today: Cash issues invoices as PDFs and exports them to CSV for your accountant. It does not issue structured UK e-invoices, and it does not file VAT returns. No software can claim compliance with a UK standard that has not been published yet. Check with us how Cash fits your currency and VAT set-up before switching your invoicing. Book a demo to see it on your own assignments.
Frequently asked questions
When does e-invoicing become mandatory in the UK?
The government announced at Budget 2025 that all VAT invoices must be issued as e-invoices from 2029, and HMRC has since given April 2029 as the date. The government says it will publish an implementation roadmap at Budget 2026. Dates can change if the government decides so.
Does the UK e-invoicing mandate apply to small businesses?
As announced, it covers all VAT invoices, which are mainly business-to-business and business-to-government invoices. A business that is not VAT registered does not issue VAT invoices. The detailed scope, including any exemptions, has not been published yet.
Is a PDF invoice sent by email an e-invoice?
Not in the sense of the mandate. An e-invoice is a structured invoice that software can read without re-typing. The UK has not yet chosen its standard or transmission model; respondents to the consultation often cited Peppol and the EN 16931 standard, but no decision has been announced.
Who has to use Making Tax Digital for Income Tax?
Sole traders and landlords registered for Self Assessment whose qualifying income is over £50,000 (from 6 April 2026), £30,000 (from 6 April 2027) or £20,000 (from 6 April 2028), each based on an earlier tax year. Partnerships will follow at a date still to be set. Limited companies are not in scope of MTD for Income Tax.
Does Marvin issue UK e-invoices?
Not today. Cash issues invoices as PDFs and exports them to CSV for your accountant. The UK e-invoicing standard has not been published, so no software can yet claim to comply with it.
