Digital Record Keeping for VAT: HMRC’s Requirements Under Making Tax Digital Initiative

• HMRC requires businesses to maintain accurate VAT records for correct tax payments.
• All businesses must retain general records like invoices, bank statements, and receipts.
• Making Tax Digital for VAT requires specific VAT records to be kept digitally.
• Digital records must include VAT on goods and services sold and purchased.
• Records must show the time and value of each supply, excluding VAT.
• Adjustments to VAT returns and reverse charge transactions must be recorded.
• VAT accounting schemes and daily gross takings for retail schemes must be documented.
• Flat Rate Scheme users must record items where VAT has been reclaimed.
• Gold Accounting Scheme users must record total sales and VAT on those sales.
• Digital records must be kept using compatible software or spreadsheets linked to HMRC systems.
• Manual data transfer is not allowed; digital links can include formulas or file imports/exports.
• Records must be kept from VAT registration and retained for at least 6 years, or 10 years for certain schemes.
• Exemptions apply to specific entities like government departments or those eligible for digital record-keeping exemptions.

Source: cigmaaccounting.co.uk

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.

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