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eInvoicing - Ability to use for non VAT registered businesses

Massive oversight by Xero.
E-Invoicing only available to VAT registered companies as you have to enter a VAT number. What about all the non-registered companies?
Why can't you select that you aren't VAT registered and be able to benefit by E-Invoicing?

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James Sowden shared this idea  ·   ·  Report…  ·  Admin →
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Gaining Support  ·  AdminKelly Munro (Community Manager, Xero) responded  · 

Hi everyone, we appreciate interest from non-VAT registered businesses that'd like to make use of the efficiencies eInvoicing brings.

As the UK do not have a standard business number, this creates complexity in being able to identify and register non-VAT registered businesses on the Peppol network.

While this is an idea that we'd like to continue to gain interest from our community in, we want to be upfront we don't have any plans to support eInvoicing for non-VAT registered businesses in the near term.

We're actively advocating for this with the UK Government as part of their recent e-Invoicing consultation.

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  • Vijay Katechia commented  ·   ·  Report

    Hi Support. Can a UK VAT registered company send an e-invoice to a Non-UK registered company who is VAT registered?
    To clarify, we would send a sales invoice (we are VAT registered to our german customer (who is also VAT registered). Your help articles suggest this is not possible? We need clarity on this as soon as possible as the new rules are coming into effect Jan 2026. Otherwise we will have to find alternative solutions, and XERO's usefulness comes into question.

    Look forward to your reply.

  • Heather Jervis commented  ·   ·  Report

    As a rental company we're not VAT registered so miss out on this feature that could save time. Have a unique identifier within XERO that people can use as a reference. I can see my company name come up in the search but can't use as not VAT registered.

  • Barry Tansey commented  ·   ·  Report

    We have an exempt VAT business and similarly to some of the other contributors we would like to incorporate e-invoicing but are precluded as we do not have a VAT registration number. This is very frustrating. Come on Xero it cannot beyond the wit of man to sort this one out !

  • George Waldie commented  ·   ·  Report

    Hi Kelly - but the Peppol directory works using a 'participant id' system right? A unique identifier?

    There are other providers in the UK that provide einvoicing functionality to non-VAT registered businesses which shows the 'problem' Xero is having is solvable.

    Also, why couldn't it be companies house number OR VAT number? That would at least open it up to a significantly larger portion of your UK client base.

    Then there's also the UTR that could be used... again a unique identifier.

  • Tim Sneller commented  ·   ·  Report

    Our turnover is well above the VAT threshold, but all of our services are VAT exempt. We would also like to use eInvoicing, but CANNOT register for VAT.

    There seems to be a perception that if you are not VAT registered, then you must be a small company, but this is not the case..

  • Christopher Williamson commented  ·   ·  Report

    Why no answer from Xero, I wonder?
    Why no explanation as why they HAD to make it for VAT-registered-only companies?

  • Marie Copley commented  ·   ·  Report

    Agreed, I don't understand the necessity in entering a VAT number for this feature! There are plenty of not-for-profit companies which utilise Xero that are not VAT registered. Please change this feature!

  • Alan Steele commented  ·   ·  Report

    To make matters worse they still suggust I use Invici every time even though I can't!

  • Alan Steele commented  ·   ·  Report

    I agree that it is a massive oversight. According to HMRC 52% of business are not VAT registered so this basically means Xero launched a useful facility that cannot be used by over half the business out there!

  • Heather Barclay commented  ·   ·  Report

    Many small businesses aren't VAT registered. They pay the same subscription to Xero as VAT registered businesses - they just can't claim back the VAT. So why is Xero treating them like second class citizens and denying them benefits that bigger businesses can access?

    I am tired of having to manually download Xero invoices every month. Why can't this be automated?