Software - HMRC provides new assistance for businesses using IT to pay VAT

HMRC provides new assistance for businesses using IT to pay VAT

New guidance aimed at helping businesses who want to utilise computers systems to comply with their Value Added Tax (VAT) obligations has been launched by HM Revenue & Customs (HMRC) and the British Standards Institute (BSi).

The BSi Publicly Available Specification 76 (PAS 76 - VAT in the UK) aims to set out the essential features that HMRC believe should be incorporated in to accounting software packages.

Amongst the benefits to be gained by businesses using PAS 76 incorporated software will be reductions in the cost, time and money they spend on VAT processing, auditing and reporting. For example, some businesses could see a reduction in VAT errors by up to 25%, therefore improving the compliance and accuracy of their VAT returns and declarations.

David Garlick, HMRC Director Large Business and Employers, said: "We are always looking at ways to encourage voluntary compliance and to help those who want to comply, to do so easily. Feedback from the business community has, for some time, requested that HMRC recommend VAT accounting packages. We believe that PAS 76, not only fulfils this demand from business, but will also play a valuable role in increasing best practice and
confidence in VAT reporting."

The PAS 76 also forms the basis for a kitemark scheme, allowing software developers to easily demonstrate their product is compliant with the requirements set out in the specification.

Commenting on the development of the PAS 76, Quincy Lissaur, Senior BSi Business consultant, said: "By engaging the BSi, HMRC found a global leader in standardisation
to assist with the development of a world-class standard. Through a rigorous consensus-based process BSi and HMRC worked with key stakeholders such as software developers to develop a specification that makes accountancy software easier to use and reduces the number of incorrect VAT returns."

By developing the PAS 76, HMRC has enabled the Organisation for Economic and Commercial Development's international guidelines on tax functionality in accounting, to become a detailed specification. More information on the PAS 76 and supporting kitemark is available by visiting www.hmrc.gov.uk.