Purpose, scope and audience (part 1)
Updated 25 September 2024
© Crown copyright 2024
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/help-with-vat-compliance-controls-guidelines-for-compliance-gfc8/purpose-scope-and-audience-part-1
Purpose and scope
These guidelines are for UK VAT registered businesses who use invoice accounting, meaning they generally account for VAT when invoices are issued and received.
The guidelines set out HMRC’s recommended approach and are designed to help you understand our expectations as you plan, carry out, and review the accounting and compliance processes that ensure VAT is accurately declared by your business.
The guidelines highlight some of a business’ systems and processes that may impact on its overall VAT compliance. This includes sales, purchases, and preparation of the VAT return. The controls included within these guidelines are designed to help businesses reduce the risk of error when accounting for VAT.
Generally, the use of software packages which are compliant with Making Tax Digital (MTD) will help reduce customer error. Although businesses are expected to comply with MTD regulations, these guidelines help businesses with additional controls to reduce the risk of VAT error. Therefore, we have set out a number of control points and examples of good compliance controls within each section. These control points are recommendations that may be considered as ways to lower the risk of errors in the relevant processes.
HMRC acknowledges that there are many different business models and structures, each with their own complexities.
The guidelines and control points:
- help you make informed decisions and consider if you have sufficient controls within your systems and processes
- should be applied to reflect the complexity and scale of your own business
- are not intended to be exhaustive or expected to apply equally to all businesses
- help you identify risks and enable you to develop a robust strategy to reduce those risks
Where you identify risks, we expect you to work towards improving compliance and to review those systems and processes more often. This will help to reduce the risk of VAT assessments, interest, and penalties.
Audience
These guidelines will be especially helpful to those who are responsible for the governance, controls, processing and submitting of the VAT return. Roles may include:
- VAT and tax managers
- finance and IT professionals involved in VAT and tax
- senior management with VAT and tax oversight, such as the designated senior accounting officer
- VAT specialists who process and submit the VAT return, whether in-house or within third party providers including shared service centres
- agents
There will be instances where the objectives of different business areas may not align for a number of reasons. This can make it difficult for those not responsible for VAT accounting to consider VAT compliance when making decisions or developing a system or process. However, where the outputs of a business area has a VAT reporting impact, we expect those business areas to work with their VAT responsible people to reduce the risk of VAT error that may arise as a consequence of their business area.
Where the guidelines refer to any technical areas, you should continue to refer to our technical manuals and guidance. These guidelines expand on our existing guidance but do not change our view of the law.