# Clearance vs decentralised e-invoicing: which has the UK chosen?

> The UK has chosen a decentralised model: invoices go business to business via providers, not through HMRC. Here's how that compares with clearance systems.

- Canonical URL: https://einvoices.uk/news/decentralised-vs-clearance-model
- Published: 20 October 2026 (2026-10-20)
- Last updated: 20 October 2026 (2026-10-20) (not updated since publication)
- Author: Floris Lindenaar, Editor, e-invoicing expert (https://einvoices.uk/authors/floris-lindenaar)
- Publisher: einvoices.uk (https://einvoices.uk)
- Type: Explainer
- Topics: 2029 mandate, Four-corner model, Peppol, HMRC
- Language: en-GB (UK English); covers the United Kingdom

## Sources

- [Electronic invoicing: promoting e-invoicing across UK businesses and the public sector](https://www.gov.uk/government/consultations/promoting-electronic-invoicing-across-uk-businesses-and-the-public-sector/electronic-invoicing-promoting-e-invoicing-across-uk-businesses-and-the-public-sector)
- [Promoting electronic invoicing across UK businesses and the public sector: consultation response](https://www.gov.uk/government/consultations/promoting-electronic-invoicing-across-uk-businesses-and-the-public-sector/outcome/promoting-electronic-invoicing-across-uk-businesses-and-the-public-sector-consultation-response)
- [Tax update 2026: simplification, modernisation and fairness summary](https://www.gov.uk/government/publications/summary-of-tax-update-2026-simplification-modernisation-and-fairness/tax-update-2026-simplification-modernisation-and-fairness-summary)
- [Peppol Continuous Transaction Controls Reference Document](https://peppol.org/wp-content/uploads/2023/02/Peppol-CTC-Reference-Document-v1.0.pdf)

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The UK has chosen a **decentralised** e-invoicing model. Invoices will travel directly from the supplier's provider to the buyer's provider over Peppol, with no government platform in the middle. In a **clearance** model, by contrast, the tax authority (or an approved intermediary) checks and approves each invoice before the buyer gets it.

The difference matters for speed, cost, resilience and how much the tax authority sees.

## The two models in plain terms

**Clearance (centralised).** The government's consultation described it like this: "With a centralised model, e-invoices are submitted to the tax authority before being issued to the buyer." The platform may validate, number or "clear" the invoice. If it is rejected, the invoice legally does not exist.

**Decentralised.** "There is no central 'hub' through which invoices are routed, with businesses submitting their invoices through their software providers direct to their customers." This is the [four-corner model](https://einvoices.uk/news/four-corner-model-explained) used by Peppol.

There is a middle path. A decentralised network can add a reporting step, where providers also send invoice data to the tax authority. That is usually called a [five-corner model](https://einvoices.uk/news/five-corner-model-uk) or decentralised continuous transaction controls (CTC). See [Five-corner model explained](https://einvoices.uk/news/five-corner-model-uk).

## Comparison

| | Clearance / centralised | Decentralised (four-corner) | Decentralised + reporting (five-corner) |
|---|---|---|---|
| Invoice route | Through a government platform | Provider to provider | Provider to provider, plus data to the tax authority |
| Tax authority sees invoices | Yes, before the buyer | No | Yes, at or near issue |
| Who validates | Government platform | Sender's and receiver's providers | Providers, sometimes with tax authority checks |
| Government build cost | High | Low | Medium |
| Single point of failure | The central platform | None central | Reporting platform, but exchange can continue |
| Examples (per the UK consultation) | Italy, Chile | Belgium, Australia | Hungary and South Korea cited for real-time reporting |
| UK 2029 | No | **Yes** | Not at launch |

## What the UK has decided

**Confirmed:**

- **Decentralised.** The consultation response says the UK's focus on a decentralised model "has not changed following the consultation responses." Of respondents, 63% agreed this was the right focus, with most others expressing no opinion.
- **Peppol.** On 23 June 2026 the government announced that "the electronic procurement system Peppol will be the core interoperability network for e-invoicing in the UK."
- **No real-time reporting at launch.** The government "will not introduce it alongside the e-invoicing mandate in 2029."

The government's reasoning was candid. The consultation said centralised models do "not always improve business efficiency" and are "costly for tax authorities to implement", so it did "not plan to explore this model in detail." The response added that many countries that chose centralised systems did so "in the context of tackling much more significant tax gaps than the UK's, which is comparatively low." For the numbers, see [E-invoicing and the VAT gap](https://einvoices.uk/news/e-invoicing-vat-gap).

It also noted that decentralised models "are also more compatible with the UK's MTD programme".

## Real examples UK businesses meet

UK businesses that trade in Europe may already know these systems:

- **Italy** routes domestic invoices through the Sistema di Interscambio (SdI), a centralised system. The Italian tax agency says the e-invoicing obligation applies to transactions between parties resident or established in Italy, so it does not usually apply to a UK supplier with no Italian establishment.
- **Belgium** made structured B2B e-invoicing compulsory between Belgian VAT-registered businesses from 1 January 2026, sent "via a decentralised network called Peppol".
- **France**, from 1 September 2026, requires invoices between French-established businesses to go through approved platforms ("plateformes agréées") together with data reporting to the tax authority, phased by company size.

For what these mean if you sell into the EU, see [UK businesses selling to EU customers](https://einvoices.uk/news/uk-businesses-selling-to-eu-e-invoicing).

## What decentralised means for you

- **You choose your provider.** Any certified Access Point, usually through your accounting or ERP software.
- **Validation happens in the network.** Your provider and your customer's provider check the invoice against the specification. You will still see rejections for bad data, but from providers, not HMRC.
- **HMRC does not see your invoices at launch.** VAT continues to be reported on your VAT return.
- **Quality depends on standards.** The consultation itself warned that without the right standards, a decentralised model "may lead to inconsistent data standards and validation rules across platforms". The specification and accreditation rules in the roadmap will be crucial.

## What is not yet known

- The UK invoice specification and validation rules.
- How Access Points will be accredited for UK use, and who supervises them.
- Whether, when and how invoice data might later be reported to HMRC.

## What to do now

- Ignore any claim that you must register with an HMRC invoicing portal. There is no such portal planned.
- Focus on clean master data, such as VAT numbers and customer identifiers, because providers will reject invoices that fail validation. See [Master data clean-up](https://einvoices.uk/news/master-data-cleanup-e-invoicing).
- Check the [mandate guide](https://einvoices.uk/mandate) after the roadmap is published at Budget 2026 on 28 October 2026.

## Frequently asked questions

### Is the UK using a clearance model for e-invoicing?

No. The government has chosen a decentralised model, in which invoices are exchanged directly between businesses through their service providers over Peppol, without passing through an HMRC platform.

### What is a clearance model?

In a clearance model, invoices are sent to a government platform, or an approved third party, which validates and clears them before the buyer receives them. Italy's Sistema di Interscambio is the best-known example.

### Could the UK switch to clearance later?

Nothing suggests that. The government said it may consider real-time reporting once e-invoicing is established, building on the e-invoicing infrastructure, but it has not proposed clearance.

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How to cite: "Clearance vs decentralised e-invoicing: which has the UK chosen?", einvoices.uk, 20 October 2026, https://einvoices.uk/news/decentralised-vs-clearance-model

einvoices.uk is an independent publication and is not affiliated with HMRC or the UK Government. Nothing here is tax advice; check the sources and official GOV.UK guidance before acting.