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Correct posting of VAT statements under MTD

MTD and supplier statements

Just looking for clarity with regards the use of supplier statements under MTD.

1 supplier provides a supplier statement which shows the net, VAT and gross of every invoice in the month (with totals at the bottom).

However some of the invoices are a mixture of zero rated and standard rated supplies but they are not separated out by VAT rate.

We could manually work out the Standard rated by using the VAT charged in the period and then post the rest to Zero rated.

Would this be sufficient or are we looking at having to post every invoice?

 

 

 

 

 

 

 

 

 

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By Mr_awol
20th Jun 2019 12:14

There was a worry (and indeed an initial stance) that you'd need to post each individual invoice. However, posting of supplier statements is now accepted by HMRC.

If the statement comprises invoices at more than one VAT rate then the individual totals relevant to each VAT rate within the payment must be recorded separately.

I believe this is the case even when the supplier makes no mention of VAT on the statement itself.

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to Mr_awol
20th Jun 2019 12:17

Mr_awol wrote:

If the statement comprises invoices at more than one VAT rate then the individual totals relevant to each VAT rate within the payment must be recorded separately.

Recorded where?
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By Mr_awol
to Wanderer
20th Jun 2019 12:24

Wanderer wrote:

Mr_awol wrote:

If the statement comprises invoices at more than one VAT rate then the individual totals relevant to each VAT rate within the payment must be recorded separately.

Recorded where?

Wherever you are recording the transactions/summary.

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to Mr_awol
20th Jun 2019 12:29

Mr_awol wrote:

Wherever you are recording the transactions/summary.

Do you mean in your digital records then? If so this isn't required when you are posting individual supplier invoices. Haven't read the legislation (if any) on this latest (supplier statement) update but if that's the case then their simplification becomes another complication.
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20th Jun 2019 12:16

Not sure it's sufficient:-

HMRC wrote:
Therefore, HMRC can accept the recording of totals from a supplier statement where all the supplies on the statement relate to the same VAT period and the total VAT charged at each rate is shown.
HMRC wrote:
The following rule has the force of law:

Where a supplier issues a statement for a period you may record the totals from the supplier statement (rather than the individual invoices) provided all supplies on the statement are to be included on the same return and the total VAT charged at each rate is shown.

It's not clear whether this has to be pre-printed by the supplier or if it can be written on, as you suggest.
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to Wanderer
20th Jun 2019 12:24

If it is only a mixture of standard and zero then it is quite easy because you can just use the total vat (on the assumption that the total vat at zero rate is zero). Hence you have net and vat. That is what you record.

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to johnhemming
20th Jun 2019 12:37

Understand that & I think it was in a earlier thread that I made this point about the development of the legislation and you commented, surprised, back to me that I was correct. However that's what's recorded in the digital records. It's a subtle difference as to how this is required to be shown on the supplier statement.

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to Wanderer
20th Jun 2019 15:31

It is developing and only a few of the HMRC statements actually have the force of law. There is, of course, a point as to whether the supplier prints a total vat on the statement or whether that is later calculated and written upon it. However, from a practical perspective
a) All the people with MTD cloud enabled accounting will be switching on MTD. There is obviously a few problems here as we know from the conversations here.
b) The people with spreadsheets and non-MTD compliant software are doing various things.
c) The people who have traditionally done handwritten accounts have a bit more of a culture shock and I think many have probably not done that much as yet.

With all of this going on the relatively subtle point as to who and how the total of vat on a statement is calculated is probably quite a low priority.

However, I would tend to agree that the idea that the calculations are automatic as part of digital records would imply that the vat totals by vat rate should be put on the statements automatically by the suppliers.

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By tom123
20th Jun 2019 16:26

I can't recall seeing VAT totals on any of the supplier statements we get?

(standard manufacturing setup)

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By DJKL
to tom123
20th Jun 2019 16:32

Reasonably Common re building trade suppliers-when we ran a trade account with B &Q (Trade UK grouping) they certainly did this, as did a few others.

My only concern would be not sure the enacted legislation re vat record keeping has been changed to permit, it certainly needed each "supply" individually recorded but it may well be the legislation says one thing but HMRC guidance says another as that is also fairly common.

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to DJKL
20th Jun 2019 16:51

I would think one could use the guidance as basis for an argument of estoppel.

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to tom123
20th Jun 2019 18:27

tom123 wrote:

I can't recall seeing VAT totals on any of the supplier statements we get?

(standard manufacturing setup)

It's not mandatory but it does happen. City Electrical Factors do it.

It's not common for companies to supply both standard and zero rated goods. The most common examples, I would guess, are in the grocery and CTN sectors.

Personally, I'd play the "undue effort" card at any VAT visit. Coupled with the fact that, although this has been the law since 1978 (maybe 1977, I can't recall exactly), nobody's bothered about it for the last forty-odd years.

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