MTD for VAT Update: Digital recordkeeping requirements - treatment of supplier statements or individual invoices

The Croner Taxwise VAT Advice line has received numerous calls from accountants whose clients receive large numbers of invoices from single suppliers,  such as builder’s merchants or drugs companies.

VAT returns for those clients have historically been prepared based on the supplier statements ( often a monthly summary), rather than the individual invoices. However, the concern until now has been that the MTD requirement relating to digital record keeping of supplies received required each supply received to be recorded individually – an exceptionally onerous task.

The good news is that HMRC have recently updated the MTD VAT Notice 700/22, and this point is now specifically covered in paragraph 4.3.3.1. The update advises that while it remains HMRC’s view that best practice would be to digitally record the individual supplies, to manage the risk of missed or duplicated entries,  they accept that additional work for a business in capturing individual supplies digitally could in itself lead to data entry errors. On this basis, HMRC advises they 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. If a business does choose this option,  they are also required to cross-reference all supplies on the supplier statement to invoices received, but HMRC goes on to confirm this can be done outside of the digital records.


Please share this article with your clients


If you have a tax query, why not contact the Tax Advice Line on 0844 892 2470 to discuss it. Our team of experts have a wealth of experience and can also provide a written consultancy service at competitive rates.

Back to Community
mm

Senior VAT Consultant
0844 892 2470


Hilary has worked in VAT since 1997, including five years with HMRC as an Assurance and Enquiries Officer. She spent eight years as a VAT manager, initially with a mid-tier accountancy firm, followed by six years with PricewaterhouseCoopers.

She has both advisory and compliance experience, working with a wide variety of clients ranging from small owner-managed businesses, to not-for-profit organisations and large multinational corporations, on the full range of VAT technical matters.

TQOTW: Professional Fees
TQOTW: Pension Deductions
TQOTW: Interest In Possession & Resident Nil-Rate Band