Over half (56%) of finance leaders claim compliance failures have already prevented overseas expansion for their business, with pressure ramping up for UK businesses, in particular, ahead of the 2029 mandatory e-invoicing mandate.

Led by HMRC, the proposed mandate will require all VAT-registered UK businesses to issue and receive structured electronic invoices, replacing PDFs and paper-based systems. With more guidance expected later in 2026 autumn budget, finance leaders have a narrowing window to assess readiness and act or risk being forced into rushed, reactive change.

Businesses in the UK face a growth crossroads, where unlocking greater efficiency is becoming a competitive advantage. Yet, 57% of invoices globally still arrive in PDF or paper format, according to an analysis of 272 million invoices conducted by Basware.

Thousands of businesses are unprepared for the mandate, facing the need for a fast overhaul of invoicing systems to prevent significant legal and financial damage.

Over one-third (36%) of businesses have already incurred fines due to incorrect tax audits, while 39% have had invoices rejected due to tax or invoicing compliance errors, according to Basware’s Beyond the Checkbox: Compliance as Strategy research of 400 global finance leaders, conducted with FT Longitude.

Abigail Myers-Antiaye, VP of Global Compliance, Basware commented: “UK businesses are significantly underestimating what this shift means, with PDF, email and paper still being widely used as a common invoicing method. Many finance teams are effectively building compliance risks into their day-to-day operations. As e-invoicing becomes mandatory, this is no longer a future concern, but a present-day readiness gap, which will directly impact operational continuity, cross-border trade, and growth opportunities if left unaddressed.”

Visibility is one of the most significant challenges facing CFOs, with 91% citing it as a major operational risk.

Leaders reported reputational harm due to compliance failures, fines and penalties from regulatory failures and fraudulent activity related to invoicing or reporting as their most common outcome from subpar e-invoicing.

“When finance teams lack visibility across the full invoice lifecycle, compliance risks multiply. E-invoicing gives organisations the control and clarity they need to reduce avoidable errors and strengthen financial governance,” Myers-Antiaye, added.

 As HMRC moves closer to formalising the UK’s e-invoicing framework, Basware is urging finance leaders to treat compliance as a strategic business priority rather than a back-office obligation. Those that act early stand to improve efficiency, strengthen resilience and unlock international growth opportunities, while late adopters risk mounting penalties, rejected invoices and costly operational disruption.