From 30 June 2015, Central Government Departments, their Executive Agencies and Non-Departmental Governing Bodies (“in-scope organisations”) will have to accept “unstructured” electronic invoices from their suppliers for invoices submitted on or after this date.
If, however, you are an in-scope organisation who has certain security requirements and handling measures in place to deal with the processing of e-invoices for reasons of national security then you are exempt from PPN 11/15.
What are “unstructured” e-invoices and what are their benefits?
Simply put, “unstructured” e-invoices are electronic versions of paper invoices, for example a scanned copy of a paper invoice. Consequently, they usually require human intervention when processing the e-invoices as they cannot be processed automatically.
However, “unstructured” e-invoices have benefits in relation to speed of invoice despatch and receipt, reduction in the likelihood of missing invoices, reduction or elimination of printing and postage and may remove the need for physical storage.
What needs to be done?
If it is feasible to do so, in-scope organisations should amend any current contracts which prohibit the use of e-invoicing, or which explicitly or implicitly require invoices only in paper form, in order to remove such restrictions.
Standard documents should be amended and future contracts must be drafted in a way which does not prohibit the use of e-invoicing or include terms which explicitly or implicitly require invoices only in paper form.
Future contracts for services or outsourcing contracts for the receipt and processing of in-scope invoices must allow for the receipt and processing of unstructured e-invoices and for structured e-invoices when required in due course.
Additionally, suppliers who wish to take advantage of this guidance and issue “unstructured” e-invoices will need to comply with VAT Notice 700/63 which applies to both structured and unstructured e-invoices. In-scope organisations should require their suppliers who wish to submit e-invoices to be aware of them and comply with the notice or any future relevant notice. If an in-scope organisation knows or has plausible indications that a supplier does not comply with the relevant VAT rules then it should not accept any einvoice from that supplier. In-scope organisations must also comply with the relevant requirements affecting receipt, processing and storage of e-invoices by purchasing bodies. This does not require an in-scope organisation to pay any invalid, erroneous or disputed invoice.
Crown Commercial Services will consult and engage with stakeholders to work towards the adoption of “structured” e-invoices over the next few months. The aim is to agree a consistent approach and standard for the acceptance of structured invoices.