The UK aims to modernise its tax and customs systems through a digital strategy centred on e-invoicing and improved compliance.

The UK’s tax, payments, and customs authority, HM Revenue and Customs (HMRC), has set out its “digital by default” strategy in a new transformation roadmap on 21 July 2025, highlighting e-invoicing as a key step toward fully digitalising the country’s tax and customs systems.

The initiative builds on the progress made under the existing Make Tax Digital (MTD) scheme. As part of the ongoing digital reform, the UK is exploring the implementation of e-invoicing to improve tax compliance and reduce administrative burdens.

HMRC recognises the important role intermediaries, such as tax advisers, customs agents and software providers, play in the tax and customs system on behalf of customers. The Charter makes it clear that customers have a right for someone to represent them.

HMRC also recognises that leveraging opportunities for greater intermediation, including use of software and technology, will move it closer to a more automated tax system. For tax advisers who interact directly with HMRC on behalf of their clients, HMRC will provide digital services that help the system run smoothly, improving the experience for tax advisers and their clients.

By 2030 HMRC will make compliance easy for those who are trying to get their tax right with as little administrative burden as possible. At the same time, to ensure fairness and trust across the tax system, and to increase revenue for public services, HMRC will make it as difficult as possible for those who seek to deliberately pay less than they should or cause harm to the tax and customs system.

HMRC’s compliance strategy is built around:

  • preventing non-compliance – developing policies, processes and digital services that prevent opportunities for error, avoidance, and evasion. This includes preventing harmful intermediaries from entering the system;
  • promoting compliance – high-quality, targeted guidance and nudging customers to make correct tax returns and customs declarations when they use HMRC’s digital services or their own tax software;
  • responding where compliance risks remain – prompting the customer to correct their tax and customs declarations themselves or deploying a compliance officer to investigate and take action to ensure money owed is paid.

The total tax gap stood at GBP 46.8 billion in 2023 to 2024. In its first year, the current government announced the biggest ever package of measures, certified by the Office for Budget Responsibility, to close the tax gap, delivering GBP 7.5 billion of additional tax revenue by 2029 to 2030. However, there is more work to do and closing the remaining areas of the tax gap will require tackling some of the toughest areas of compliance risk.

HMRC and the Department for Business and Trade (DBT) are jointly leading efforts to encourage the uptake of e-invoicing across both the private and public sectors. Public consultation on the matter closed in May 2025, with the collected responses set to inform the UK’s future approach to the adoption of e-invoicing.

The proposal forms part of a broader effort to enhance the efficiency, transparency, and effectiveness of the UK’s tax system by leveraging digital tools.