HMRC Asks Whether It Could Also Receive E-Invoice Data in the Future, and Says No Decision Has Been Taken to Introduce Digital Reporting

From April 1, 2029, the UK government will require VAT invoices to be issued as e-invoices, exchanged between businesses in a standard digital format. On October 28, 2026, HM Revenue and Customs published a consultation that seeks views on how the structured data created through e-invoicing could be used, and "on whether there may be circumstances in which HMRC could also receive invoice data in the future to support tax administration and wider public services."

The consultation runs for 12 weeks, to January 20, 2027. It "does not introduce digital reporting requirements or ask businesses or software providers to take any action in anticipation of its outcome." Parts of it follow, not the whole.

What Digital Reporting Would Mean

For the consultation, digital reporting means "the potential sharing, provision of or access to selected e-invoice data for defined purposes." It is separate from the requirement to issue and receive e-invoices, and "does not mean that HMRC would automatically receive every e-invoice or all the data it contains." In some countries, it notes, invoice data from e-invoicing is reported directly to the tax administration.

The government wants evidence on whether appropriate access to selected data could make it easier for businesses to get their tax right, including through earlier checks or prompts; reduce duplicate reporting, manual evidence gathering and separate requests for information; improve the speed and targeting of VAT repayment assurance and compliance work; let software and e-invoicing providers offer more automated services; and support clearly defined wider public functions, where there is a credible need and appropriate aggregation, governance and safeguards. "These are opportunities to explore rather than assumed benefits, and they do not amount to a proposal for a particular reporting system."

The key test, it says, is "whether use of particular data for a defined purpose could deliver a better outcome than existing approaches, with practical and reciprocal benefits for businesses as well as government."

The Questions It Asks

The consultation puts 29 questions. The second asks: "What problems, if any, could access to selected e-invoice data help solve? Could the same outcomes be achieved more simply in another way?" Others ask what data and level of timeliness would be needed, and which existing processes, reporting or evidence requirements could realistically be removed or simplified in the VAT return.

On VAT repayments, where businesses and agents may be asked for invoice data or copies of invoices, it says consistent and safeguarded data could reduce manual evidence gathering and help some legitimate claims to be resolved more quickly. "However, invoice data may not provide all the context needed," it says, and the government wants evidence on where it would "materially change or accelerate decisions rather than simply add another information source."

Safeguards and Next Steps

"Invoice data may contain commercially sensitive and other protected information," the consultation says. "Any future use would need to be lawful, secure, proportionate and transparent, with access limited to clearly defined purposes." The relevant considerations, it says, include data minimization, commercial confidentiality, security and access controls, accuracy and routes to correct errors, retention and deletion, transparency about what data is available and why, accountability for use, and effective governance and assurance. "These issues must be designed into any future option rather than treated as an addition at the end."

Who may see invoice data, and for what, is the question this consultation leaves open.

The government says it does not intend to develop detailed proposals from written responses alone, and that it will hold workshops, roundtables and technical discussions alongside the written consultation. "This consultation is the beginning of policy development, not the end." The responses and that work will inform a decision on whether there is a sufficiently strong case to develop options. "No decision has been taken to introduce digital reporting and the outcome is not predetermined."

Routes to correct errors are on the government's own list. Data that reaches a tax authority with a mistake in it needs a way back out.