The Essential Guide to UK VAT Compliance

VAT Compliance 

Tax compliance is the ability and willingness of taxpayers to abide by the tax laws, report their income accurately and pay the appropriate taxes on schedule. Businesses and traders are typically entangled with value-added tax (VAT) amongst the various UK  indirect taxes.  In 2021/22, £143 billion of UK’s taxes were collected from VAT. 

These taxes apply to all sizes of businesses, and each tax has its own compliance requirements and due dates. Some businesses are prone to confusion and may overlook one or more standards. It is essential to take a systematic strategy if you want to make sure you adhere to all compliance requirements, which include: 

• List all the tax regulations that apply to you. 
• Make a list of all the required forms and returns you must file under each applicable tax law. 
• Organise and maintain books and supporting documentation. 
• Keep an eye out for changes to the tax legislation. 

Tax compliance for companies requires not only a solid understanding of the numerous tax compliance regulations but also a lot of time and effort to implement. Businesses are accountable for correctly processing and reporting on VAT. If done properly, this gives tax authorities the ability to boost economic growth and investment. 

What are the consequences of non-compliance? 

Despite governments implementing various audits procedures, often fraud, negligence, and human error can result in governments collecting much less VAT than they ought to. This has created a VAT gap. It’s estimated that the VAT gap, globally, has grown to over 500€ billion. The latest estimate for the UK’s VAT gap is £7.7billion. 

Tax authorities are applying various legal sanctions and rules to close the growing VAT gap. Businesses must be prepared so they can swiftly and readily demonstrate their global VAT compliance to avoid these penalties. 

Vertex VAT Compliance 

It’s no secret, VAT compliance takes a lot of time, money, and effort to manage. Vertex VAT Compliance enhances audit performance, streamlines and automates the filing of VAT reports, and returns. 

Organisations can enable business expansion with Vertex VAT Compliance without adding to the burden of the VAT process. The solution enhances data quality, automates multi-country VAT reports and returns, and keeps the company processes in line with all relevant legislative changes. It helps global initiatives to increase digitalisation, such as Making Tax Digital in the UK, SII in Spain, and RTR in Hungary. 

Vertex VAT Compliance improves visibility, usability, and scalability by conducting data enhancements and quality checks before filing VAT returns. It provides the ability to dig deeper from returns to specific transaction data enhancing audit support. Additionally, cloud access speeds up deployment, lowers the need for IT infrastructure and maintenance, and scales quickly to accommodate business expansion.