- HMRC published new guidance on VAT compliance controls.
- The guidance aims to reduce errors and checks.
- It applies to all VAT-registered businesses.
- The guidance covers governance, controls, and processes for VAT accounting.
- It emphasizes the importance of risk management, control design, and documentation.
- HMRC expects clear audit trails of documentation to support VAT treatment.
- Businesses should ensure correct tax treatment before issuing sales or purchase orders.
- Invoicing and credit notes should be created accurately and issued timely.
- HMRC recommends specific controls at each stage of the audit trail to manage VAT risk.
- Clear policies and guidance for expenses are expected.
- Automated VAT calculations are preferred over manual workings.
- Businesses should use version control, automatic linking, drop-down menus, and trained developers for spreadsheets.
- Risk-based checks are expected.
Source: icaew.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
