details

Executive summary

Her Majesty’s Revenue and Customs (HMRC) embrace all three options allowed in the EU Directives on eInvoicing – EDI, Digital Signatures AND any other approved process. HMRC focus on the whole accounting process, matching invoices to orders and other relevant documents.

The UK eInvoicing definition is: “Electronic invoicing is the transmission and storage of invoices, without the delivery of paper documents, by electronic means. Electronic equipment is used for the processing (including digital compression) and storage of data.”


The three options

The UK description of EDI is:

“a computer-to-computer exchange of structured data that permits automatic processing by the recipient”.

There should be an interchange agreement between the EDI trading partners making provision for the use of procedures that guarantee the authenticity of the origin and integrity of the data. Examples of such procedures include:
• use of secure networks;
• controls over access to networks (for example, checking "trading relationships");
• syntax checking of data in accordance with the rules of the transmission standard;
• and summary file control reporting.

UK is prepared to accept electronic invoicing where the authenticity of the origin and integrity of the invoice data are guaranteed by means other than the use of electronic signatures or EDI, for supplies made in the UK, as long as you are able to impose a satisfactory level of control over the authenticity and integrity of your invoice data. Examples of this control include:

• security of networks/communication links;
• access controls; and
• message transfer protocols (for example, http-s).

Provided that the relevant invoice messages used contain the required data, UK will accept a wide variety of electronic invoice message formats.

Examples include:

• traditional EDI standards such as UN/EDIFACT, ODETTE and TRADACOMS;
• XML-based standards;
• comma-delimited ASCII, PDF.

You must transmit your invoices in a secure environment, using industry-accepted security technologies on the:

• messages themselves; or
• communication links/networks over which the invoices are transferred.

Examples of these include http-s, SSL, S-MIME and FTP.

Alternatively, you may use other procedural means that offer similar assurances. You must be able to ensure the authenticity and integrity of your invoice data during the transfer between trading partners.

If you are issuing electronic invoices to other member states then those invoices must meet the UK conditions for electronic invoicing.

Conditions for electronic storage

You must be able to ensure the authenticity and integrity of your invoice data during and after application processing.

You must:
• be able to guarantee the authenticity and the integrity of the content of your source documents throughout the storage period by electronic or procedural means, and store all the data related to your invoices; and
• store your invoices in a readable format. You must readily be able to recreate the invoice information as at the time of its original transmission.

The same rules apply to storage of electronic invoices as to paper invoices so you must normally keep copies of all the invoices you issue and all the invoices you receive for 6 years.

You may store electronic invoices in another EU Member State but you must still be able to produce any records we require from you in a readable form, and within a reasonable period of time, at a mutually agreed place.

It is recommended that you maintain on-line access to your records if you store them outside the UK.

You may store electronic invoices outside the European Union provided that the country where you are storing your invoices respects European Data
Protection principles regarding the storage of personal data, names/addresses etc); and you can produce any required records in a readable form, and within a reasonable period of time, at a mutually agreed place

If you receive electronic invoices from your suppliers, you must meet the same conditions for storing them as are set out for suppliers. This also applies to scanned images of paper documents used as stored electronic
records for VAT purposes.

Legal aspects

The law doesn't compel you to use electronic invoicing. It's up to you whether
you issue paper or electronic VAT invoices.

In the UK you cannot use paper and electronic VAT invoicing at the same time. If you were to raise both electronic and paper invoices for the same supplies, or with the same trading partners, you would be running what is known as a dual system. This is only allowed when running system trials.

Electronic invoices must contain the same information as paper invoices.

If you are sending batches of invoices to the same customer, you may record details that are common to the individual invoices once per computer file rather than once per invoice.

You may also process credit notes but if you issue invoices to persons in another Member State, documents that amend those invoices, for example credit notes or debit notes, must contain the same information that is required on an invoice.

You may express the invoice amounts in any currency but you must express the total amount of VAT due in sterling where there is a positive rate of VAT due in the UK.