VAT Notice 700/22 4.3.2 says 'For each supply you make you must record the:
- time of supply - the tax point
- value of the supply - the net value excluding VAT
- rate of VAT charged
Note the requirement to record the rate of VAT - there is no requirement to record the actual output VAT.
The spreadhsets used by our clients don't record the rate: they record the gross, VAT and net. We'll be using Absolute VATfiler to link these to HMRC. Does anyone intend to amend their spreadsheets to record the rate of VAT in accordance with 700/22?
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Does anyone intend to amend their spreadsheets to record the rate of VAT in accordance with 700/22?
No.
Or, you could set the VAT column to calculate via a formula, rather than typing it in, to be compliant. I wouldn't be losing a moments sleep over it either way TBH
It has always been a requirement to record the vat rate on the invoice or the line items and it has always been a requirement to retain a copy of that invoice. The requirement to store this information digitally means that if you don’t currently store the rate (why not?) then you should start to do so.
so if everything has been completed incorrectly for 40 years plus ( mine time in Accountancy ) is their not a case to complete digital records in a form other than laid down in the VAT notice , in other words the VAT notice has not been enforced in my 40 years so why change now ?
Isn't the issue that in the past you could record the VAT rate on the invoice only, it didn't have to be recorded in the sales day book, now it appears the invoices do not need to be kept as part of the digital records but the rate does.
Quite.
But does much of the software actually do that? In such, its usually done by codes (or formula coding or whatever you call it) in the background.
Question is - will the vat rate show separately on MTD reports from the software, or is all this just ridiculous overkill.
If it records the VAT, net and Gross, then surely it also records the rate?
Or at least if HMRC looked at it you could drop a quick column and make it so. *coughs*
I'm guessing they want the rate recorded as a separate item so that, in the fullness of time when every transaction will be uploaded to their servers (and at which point the Revenue will probably also be telling us what colour underpants to put on every day), our lords and masters can undertake exception reporting. Or at least that's likely to be their fantasy.
I don't believe there is a difference between recording the net and the VAT rate or the net and the VAT amount. It is, by any reasonable mathematical definition, identical.
VTT+ already does this in the input and output VAT tabs.
On a spreadsheet surely it's just a case of adding a VAT rate column?
They'll need to break down these into 1 line for the VATable amount, and 1 for the non. This is where the VAT rate and a flag would come in handy to spot!
Hey Kevin,
We'd recommend adding a simply VAT rate check column, and automating a formula to ensure the correct amounts are charged. You could also add a handy conditional formatting to flag anything that isn't a standard VAT rate, catching split supplies that would need to be broken down into separate lines. Overkill? Perhaps.. Peace of mind? Priceless.. Handy for clients? Only if they look at it..