The government has asked businesses for comment on a UK approach to electronic invoicing (e-invoicing), which is part of its plan to grow the economy.
A 12-week consultation on e-invoicing in business asked firms and other stakeholders for feedback on topics including different models of e-invoicing, if a mandated or voluntary approach is best and whether e-invoicing should be complemented by real-time digital reporting.
This is part of the government’s plan for change, which has “kickstart economic growth” as one of its five missions. Both HMRC and the Department for Business and Trade are behind the plans, which could improve tax collection and business efficiency.
According to the government announcement, the consultation “will gather views on standardising e-invoicing and how to increase its adoption across UK businesses and the public sector”. It will also look at different e-invoicing models, with evidence sought from businesses whether they currently use e-invoicing or not.
The government said the use of e-invoicing technology could help businesses “get their tax right first time, reduce invoicing and data errors, improve the accuracy of VAT returns, help close the tax gap, and save time and money”.
It added that e-invoicing can speed up business-to-business payments, which improves cash flow and reduces paperwork.
DBT minister Gareth Thomas said small businesses are at the heart of the economy and vital to the country’s growth. “The potential of digitising taxes, speeding up payments and streamlining administrative tasks will provide real benefits to the economy, supporting smaller firms and boosting growth,” he said. “This is why we want to make sure e-invoicing works for SMEs [small and medium-sized enterprises], because cash flow can make all the difference between staying afloat or going under.”
The government cited success stories where e-invoicing has speeded up payments for business.
It said an unnamed NHS trust has used e-invoicing to reduce the time it takes to get invoices ready for processing from 10 days to 24 hours, with queries from suppliers reduced by 15%. It also said that in Australia, government agencies are settling e-invoices in five days rather than 20 days with traditional invoices.
It also highlighted research from UK accounting software firm Sage, which found that e-invoicing streamlines routine tasks including data entry and tax filing, resulting in 3% productivity gains.
The consultation, Promoting electronic invoicing across UK businesses and the public sector, is open until 7 May.
“E-invoicing simplifies processes, reduces errors and helps businesses to get paid faster,” said James Murray, exchequer secretary to the Treasury. “By cutting paperwork and freeing up valuable time and money, it will help improve firms’ productivity and their ability to grow and succeed.
“As part of the prime minister’s plan for change, we have begun our work to transform the UK’s tax system into one that is focused on helping businesses and the economy to grow.”
The government said about 130 countries already have or are in the process of implementing e-invoicing structures and standards, which includes what data they should include and its format.
This post is exclusively published on eduexpertisehub.com
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