2 min read
Definition
A VAT account is the running record a VAT-registered business must keep of the VAT it charges and reclaims, reconciling to each VAT return. Under Making Tax Digital it must be kept digitally.
In plain terms
It is the ledger that ties your sales and purchase VAT to what you report to HMRC. Kept properly, filling in the return is just a matter of reading it off.
Why it matters for your company
A clean VAT account makes returns fast and accurate and is exactly what HMRC asks to see in an inspection. Sloppy VAT records are a common cause of errors and assessments.
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