KPMG insights – our view
From an indirect tax perspective, this Budget was less about major changes to headline VAT rates and more about targeted measures aimed at reducing costs for businesses and consumers.
As expected, the Government’s publication of its UK e-invoicing implementation roadmap has provided further detail on the journey towards mandatory e-invoicing for VAT invoices from April 2029.
Although the roadmap was published as expected and provides lots of background and rationale for the introduction of e-invoicing, on a closer reading, there is not much specific detail on the how the changes are going to be implemented.
We will have to wait until April 2028 for full details on the policy and technical design of e-invoicing to be provided.
However, a further consultation is being launched on the potential future uses of the data generated by e-invoicing, which may be of more interest to businesses and may indicate a step in the direction of digital reporting, which has not previously been explored in the UK.
In addition, there have been some closing of loopholes, which may have a material impact for overseas service providers whose UK business customers are not UK VAT registered.
As in previous years, the calls on the Chancellor in advance of the Budget from a VAT perspective have been to help simplify the VAT rules.
Although some measures may be regarded as simplification in nature, the changes are relatively small and VAT remains a highly complex tax, full of exceptions and complicated rules.
We therefore will have to wait yet again for any significant simplification steps to be taken.
