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United Kingdom Compliance Requirements (VAT): KhataOS Spec

Status as of: 2026-10-20. Scope: VAT-registered UK businesses (companies, partnerships, sole traders) in Great Britain and Northern Ireland keeping books in KhataOS, a local-first desktop accounting app. The khata-gb pack implements the VAT items below (see docs/uk-vat.md). Not legal advice. This file turns HMRC guidance, legislation and HMRC's API specification into software requirements. Get a UK chartered accountant or chartered tax adviser to confirm each item before release.

Confidence tags: - [PRIMARY] means confirmed against the legislation (legislation.gov.uk), HMRC guidance or notices on GOV.UK, an HMRC internal manual, HMRC's own (archived) developer-forum material, or the HMRC Developer Hub API specification. - [SECONDARY] means reported consistently by reputable non-HMRC sources (Wikipedia citing HMRC documents, open-source validators), but the HMRC text was not retrieved in this research. - [UNCERTAIN] means sources conflict, the item is interpretive, or the point was not found. Flagged for review.

0. MVP must-do checklist (summary)

# Capability Driven by
1 VAT registration number (VRN) validation: 9 digits with two HMRC check digits (modulus 97, or the newer "97-55" series), 12-digit branch numbers, GD/HA government and health-authority numbers, GB / XI prefixes HMRC VAT Software Developer Forum, 10 Mar 2009 (§1.2)
2 VAT rates 20% / 5% / 0% from an effective-dated master; exempt and outside-the-scope kept apart from zero-rated VATA 1994 s2, s29A, s30, s31; VAT Notice 700 §3
3 VAT invoices with every reg 14 particular, a sequential number from one or more series, issued within 30 days; simplified invoices up to £250 VAT Regulations 1995 regs 13, 14, 16; Notice 700 §16; Notice 700/21 §4
4 The 9-box VAT return from the books (Boxes 1 to 5 in pounds and pence, 6 to 9 in whole pounds) Notice 700/12 §3; VAT (MTD) API spec
5 Making Tax Digital: digital records, digital links, submission through the VAT (MTD) API with OAuth 2.0 and fraud-prevention headers Notice 700/22; HMRC Developer Hub
6 Northern Ireland: XI prefix for goods trade with the EU under the Windsor Framework; Boxes 2, 8, 9 are NI-only GOV.UK register-for-vat NI page; Notice 700/12 §3.3, §3.9, §3.10
7 Records kept 6 years Notice 700/21 §2.4

1. VAT (Value Added Tax Act 1994; VAT Regulations 1995)

1.1 Registration and identity

Requirement Source Effective date What the software must do
Registration threshold: register when taxable turnover goes above £90,000; may deregister at or below £88,000 GOV.UK How VAT works: VAT thresholds [PRIMARY] (the 1 Apr 2024 start date was not on the page retrieved [UNCERTAIN]) Current Rolling 12-month taxable-turnover monitor (future work)
VRN format: 9 digits, written "123 4567 89", usually shown with the country prefix GB Notice 700 §16.7 example "VAT No: 987 6543 21" [PRIMARY]; HMRC Developer Hub VAT (MTD) API: vrn "A nine-digit number" [PRIMARY] 1 Apr 1973 Accept with or without the prefix and with spaces; store the digits (and the prefix if typed)
Check digits: the VRN is "seven digit numbers with two check digits attached (derived using Modulus 97)"; a new series used "modulus 9755"; "the moduli would both be applied, first Mod 97 and, if that failed, Mod 9755. A 'fail' of both checks would indicate a spurious VRN." HMRC, Minutes of VAT Software Developer Forum, 10 Mar 2009, item 6 (archived: web.archive.org/web/20121012000313/http://www.hmrc.gov.uk/ebu/dev-forum-mins100309.pdf) [PRIMARY] New series from Nov 2009 [SECONDARY: Wikipedia citing the same HMRC forum] Implement both checks (see §1.2)
Algorithm (HMRC slides "VAT Registration Numbers — New series", Stan Quayle, same forum): multiply the first seven digits by 8, 7, 6, 5, 4, 3, 2; take the sum of products; "if sum > 97 subtract 97, repeat"; "subtract result from 97 = check digits". The revised Modulus 97-55 adds 55 to the sum first. HMRC's worked example: 562 2359 45 (Mod 97) and 562 2359 87 (Mod 9755) HMRC slide deck VAT Forum 10 March 2009.ppt in dev-forum-slides100309.zip (archived at web.archive.org/web/20121012000326/http://www.hmrc.gov.uk/ebu/dev-forum-slides100309.zip) [PRIMARY]; the "add 55" reading is confirmed by HMRC's own example (149 + 55 = 204; 204 − 2×97 = 10; 97 − 10 = 87), not by explicit wording [PRIMARY by example] 2009 See §1.2
Some sources word the 97-55 rule as "55 is subtracted" Wikipedia VAT identification number citing HMRC slides [SECONDARY]; python-stdnum accepts remainders 0, 42 and 55 [SECONDARY] — Not followed: HMRC's own example 562 2359 87 only passes the "add 55" form. KhataOS accepts remainder 0 (Mod 97) or 42 (Mod 97-55) only [UNCERTAIN whether any real VRN uses the "subtract" form]
Branch / group traders: 12 digits (the 9-digit VRN followed by a 3-digit branch identifier) Wikipedia (no inline citation) [SECONDARY]; python-stdnum [SECONDARY] — Accept 12 digits; check digits on the first 9; expose the 9-digit VRN
Government departments GD + 3 digits 000–499; health authorities HA + 3 digits 500–999 Wikipedia citing HMRC V1-28 Registration Vol 1 (archived) [SECONDARY] — Accept, without a check digit (none exists for these)
The HMRC example VRN on Notice 700's sample invoice ("987 6543 21") does not pass either check Calculated here: 9·8+8·7+7·6+6·5+5·4+4·3+3·2 = 238; Mod 97 gives 53, Mod 97-55 gives 95 — Example numbers in guidance are illustrative; do not use them as test data
A check-digit pass only shows the number is well-formed. Whether it is registered is confirmed online (HMRC Check a UK VAT number service / API) HMRC forum minutes ("spurious VRN") [PRIMARY]; validator sites [SECONDARY] — Optional online check is future work
Northern Ireland XI prefix: "You need a VAT registration number starting with XI to trade under the Windsor Framework"; after HMRC's confirmation email, "start using the XI prefix before your usual VAT registration number" ("XI 123456789 instead of GB 123456789"); use it "on all documentation" with EU customers and suppliers. Eligible when goods are located in NI at the time of sale, received in NI from VAT-registered EU businesses, or sold/moved from NI to the EU GOV.UK Register for VAT: selling or moving goods between Northern Ireland and the EU [PRIMARY]; VAT Regulations 1995 reg 14(2)(b): "the letters "XI" as a prefix to his registration number" on invoices to a person in an EU member state [PRIMARY] 1 Jan 2021 Accept XI + the same 9 digits; the XI number is the same VRN. Treat a party with an XI number as NI for goods (Boxes 8/9)
Notice 700/21 §4.2 still says NI businesses invoicing EU persons put "the letters 'GB' in front of your registration number" GOV.UK Notice 700/21 [PRIMARY, apparently stale] — Follows reg 14(2)(b) (XI); flag Notice 700/21 §4.2 as inconsistent [UNCERTAIN]

1.2 VRN check digits — the algorithm as implemented

For a 9-digit VRN d1 … d9 (and the first 9 digits of a 12-digit branch number):

  1. S = 8·d1 + 7·d2 + 6·d3 + 5·d4 + 4·d5 + 3·d6 + 2·d7.
  2. Mod 97: expected check C97 = (97 − S mod 97) mod 97 (HMRC: "subtract 97 until ≤ 97, subtract result from 97"; a remainder of 0 gives 97 − 97 = 00).
  3. Mod 97-55: expected check C9755 = (97 − (S + 55) mod 97) mod 97.
  4. The number is valid when 10·d8 + d9 equals C97 or C9755. Both expected values are 00–96, so check digits 97–99 never pass.

Equivalently, with weights 8,7,6,5,4,3,2,10,1 over all nine digits, the weighted sum mod 97 is 0 (Mod 97) or 42 (Mod 97-55).

Test vectors: HMRC's own 562 2359 45 (Mod 97) and 562 2359 87 (Mod 97-55) [PRIMARY]; 339 0727 47 (taxationweb.co.uk worked example) and 980 7806 84 (python-stdnum docstring), both Mod 97 [SECONDARY, verified by the algorithm].

1.3 Rates, exemption, scope

Requirement Source Effective date What the software must do
Standard rate 20% VATA 1994 s2(1) "VAT shall be charged at the rate of 20 per cent" (words substituted by F(No.2)A 2010 s3(1), 27 Jul 2010) [PRIMARY]; Notice 700 §3.3.1 table: 20% from 4 January 2011 [PRIMARY]; GOV.UK VAT rates [PRIMARY] 4 Jan 2011 (17.5% before) STANDARD 20% from 2011-01-04 in the default rate list; earlier rates are not seeded
Reduced rate 5% ("for example, children's car seats and home energy") GOV.UK VAT rates [PRIMARY]; Notice 700 §3.3.1: 5% from 1 Sep 1997 [PRIMARY]; VATA 1994 s29A and Sch 7A [PRIMARY, statutory reference] 1 Sep 1997 REDUCED 5% (seeded from 2011-01-04 alongside the others; earlier history is not needed for current books)
Zero rate 0% ("most food and children's clothes"); a zero-rated supply is still a taxable supply; "The zero rate has existed throughout that time" GOV.UK VAT rates; Notice 700 §3.3.1, §3.5 [PRIMARY]; VATA 1994 s30, Sch 8 1 Apr 1973 ZERO 0%. Zero-rated supplies keep input-tax recovery
Exports of goods outside the UK are zero-rated (with evidence conditions) VATA 1994 s30(6), (8) [PRIMARY, statutory reference]; Notice 703 [not retrieved] — A sale to a party abroad is zero-rated; evidence conditions are not checked
Exempt ("such as postage stamps, financial and property transactions"): no VAT, and related input tax is generally not recoverable GOV.UK VAT rates; Notice 700 §3.6 [PRIMARY]; VATA 1994 s31, Sch 9 — EXEMPT class (0%), told apart from zero-rated by name, as in khata-ae
Outside the scope: supplies by a non-taxable person, made outside the UK and Isle of Man, or not in the course or furtherance of business (also e.g. optional service charges, §8.14) Notice 700 §3.2 [PRIMARY] — Not a rate class: such items should not be on a VAT invoice. Not modelled (no "outside scope" treatment yet)
Isle of Man is in the same VAT area; IoM registrations share the 9 and 12-digit formats Notice 700 §3.2, §4.7 [PRIMARY]; Wikipedia citing IoM Government [SECONDARY] — IoM VRNs validate the same way; IoM is not a region in the pack

1.4 VAT invoices

Requirement Source Effective date What the software must do
A VAT-registered person supplying standard or reduced-rated goods or services to another VAT-registered person "must give that person a VAT invoice", normally "within 30 days of the tax point" Notice 700 §16.2.1, §16.2.3 [PRIMARY]; VAT Regulations 1995 reg 13 [PRIMARY, statutory reference] — Warn when a B2B invoice is issued more than 30 days after the tax point (future work)
Full VAT invoice particulars (reg 14(1)): (a) "a sequential number based on one or more series which uniquely identifies the document"; (b) the time of the supply; (c) the date of issue; (d) supplier's name, address and registration number; (e) recipient's name and address; (g) a description identifying the goods or services; (h) for each description, the quantity or extent, the rate of VAT and the amount payable excluding VAT; (i) the gross total excluding VAT; (j) the rate of any cash discount; (l) "the total amount of VAT chargeable, expressed in sterling"; (m) the unit price; (n) a reference to any margin scheme VAT Regulations 1995 reg 14(1) on legislation.gov.uk (revised to 8 Nov 2021, no outstanding effects) [PRIMARY]; Notice 700/21 §4.1 [PRIMARY] — Invoice print template carries every field (print work is outside this pack)
Invoice numbering: sequential, from one or more series, uniquely identifying the document. No length or character set is prescribed reg 14(1)(a) [PRIMARY] — KhataOS rule: unique across all years in the series (no reset is implied by the text), ≤ 35 characters of letters, digits, - and / (a KhataOS choice, as for the UAE) [UNCERTAIN: whether HMRC requires gap-free numbering is interpretive; KhataOS series are gap-free by construction]
Simplified (less detailed) invoice when the supply, VAT included, is £250 or less: supplier's name, address and VRN, time of supply, description, VAT-inclusive total and the rate for each rate; exempt supplies must not be included Notice 700/21 §4.4, §4.5 [PRIMARY]; Notice 700 §16.6.1, §16.6.2 [PRIMARY]; reg 16 [PRIMARY, statutory reference]; HMRC manual VATREC16042 [PRIMARY] — Future work: a simplified-invoice layout gated on the £250 limit
Modified invoice: above £250, a full or modified VAT invoice "showing VAT inclusive rather than VAT exclusive values" (with the customer's agreement) Notice 700/21 §4.4, §4.5 [PRIMARY]; VATF42421 [PRIMARY] — Future work
Northern Ireland to EU invoices: supplier's VRN with the XI prefix and the customer's EU VAT number with its country code reg 14(2) [PRIMARY]; GOV.UK NI register page [PRIMARY] 1 Jan 2021 Print the stored prefix
Rounding: "You may round down the total VAT payable on all goods and services shown on a VAT invoice to a whole penny" (§17.5). At line level, round down to the nearest 0.1p, or to the nearest 1p or 0.5p — "Whatever you decide, you must be consistent" (§17.5.1). Per-unit amounts: 4 places rounded to 3, or nearest 1p / 0.5p; VAT on a standard or reduced-rated item must not be rounded down to nil (§17.5.2). Retailers "must not round the VAT figure down" (§17.6) VAT Notice 700 §17.5–§17.6 [PRIMARY] — KhataOS rounds each line to the nearest 1p (allowed by §17.5.1), midpoint away from zero [UNCERTAIN: the notice does not say which way a half-penny goes]. vat::document_vat gives the invoice-level figure rounded down to the penny (§17.5)

1.5 VAT return (the 9 boxes)

Box Definition (Notice 700/12, last updated 19 Dec 2025) Source
1 "Include the VAT due on all goods and services you supplied in the period covered by the return." Also: VAT under the domestic reverse charge (customer), postponed import VAT §3.2 [PRIMARY]; reverse charge / PVA: GOV.UK guidance pages [PRIMARY]
2 "the VAT due on all goods and related costs bought from VAT-registered suppliers in EU member states" — "Since 1 January 2021, you're only allowed to make acquisitions on goods you bring into Northern Ireland from the EU." §3.3 [PRIMARY]
3 "the total VAT due, that is, boxes 1 and 2 added together" §3.4 [PRIMARY]
4 "the total amount of deductible VAT charged on your business purchases" §3.5 [PRIMARY]
5 "deduct the number in box 4 from the number in box 3"; if box 4 is larger, HMRC repays. No minus sign on paper §3.6, §3.1 [PRIMARY]
6 "the total value of all your business sales and other specific outputs but leave out any VAT" — includes zero-rated, reduced-rate and exempt supplies, exports and reverse-charge transactions; excludes capital introduced, loans, dividends, gifts of money, insurance claims §3.7 [PRIMARY]
7 "the total value of your purchases and expenses but leave out any VAT" — includes imports, NI acquisitions, reverse charge; excludes wages, PAYE/NI, drawings, loans, dividends, insurance claims, MOT, vehicle licence duty, rates, and anything outside the scope of VAT §3.8 [PRIMARY]
8 "the total value of all supplies of goods to EU member states and directly related costs" — goods dispatched from Northern Ireland to the EU from 1 Jan 2021; also included in Box 6; excludes separately invoiced services §3.9 [PRIMARY]
9 "the total value of all acquisitions of goods from VAT-registered suppliers in EU member states" — into Northern Ireland from 1 Jan 2021; also included in Box 7 §3.10 [PRIMARY]

Pounds and pence. The VAT (MTD) API defines Boxes 1–5 as "a monetary value (to 2 decimal places)" and Boxes 6–9 as "a monetary value (to 2 zeroed decimal places)" (whole pounds), netVatDue (Box 5) as "The absolute difference between the totalVatDue and vatReclaimedCurrPeriod … a positive number … HMRC will automatically determine whether the number represents net VAT that is due or net VAT that can be reclaimed", with minimum 0 [PRIMARY: HMRC Developer Hub OAS vat-api 1.0, schema VATReturnDeclaration]. How to get to whole pounds is not stated: KhataOS truncates the pence (drops them toward zero), the long-standing paper-return instruction [UNCERTAIN: the instruction was not on the current Notice 700/12 page; HMRC does not penalise either way for pence].

Due date and periods. "You usually need to send a VAT Return to HMRC every 3 months"; deadline "one calendar month and 7 days after the end of an accounting period", payment the same [PRIMARY: GOV.UK VAT Returns; Notice 700/12 §5]. "The standard tax period is 3 months" (Notice 700 §20.3.1); monthly and non-standard periods on application (§20.3.3) [PRIMARY]. Annual Accounting: one return a year, due 2 months after the period (Notice 700/12 §5) [PRIMARY]. In MTD the period comes from the obligations API as a 4-character periodKey (e.g. 18A1, occasionally with #) [PRIMARY: OAS].

Error correction. Net errors up to £10,000, or up to 1% of Box 6 (max £50,000), may be corrected on the next return (Method 1); otherwise report separately (Method 2); 4-year time limit [PRIMARY: Notice 700/45 §4.2–§4.7]. Not modelled: the return is worked out from the period's documents only.

1.6 Making Tax Digital for VAT (MTD)

Requirement Source Effective date What the software must do
Businesses above the threshold: digital records and software submission for VAT periods starting on or after 1 Apr 2019; all VAT-registered businesses from their first period starting on or after 1 Apr 2022; HMRC now signs new registrations up automatically GOV.UK MTD for VAT collection and news [PRIMARY as reported by search; pages not fetched in full → SECONDARY]; Notice 700/22 §1.2 "all VAT-registered businesses to keep records digitally" [PRIMARY] 1 Apr 2019 / 1 Apr 2022 KhataOS is the digital record
Digital records: business name, principal place of business, VRN, VAT schemes used; for each supply the time of supply, value excluding VAT and rate Notice 700/22 §3.3.1–§3.3.2 [PRIMARY] — Already in the books (vouchers, company profile)
Digital links: data must move between programs electronically (linked cells, XML/CSV import/export, API); "cut and paste" or "copy and paste" and manual re-keying are not digital links Notice 700/22 §3.2.1 [PRIMARY] — The return comes straight from the books; the MTD JSON export is a file transfer (a digital link)
Functional compatible software must record and preserve digital records, provide returns to HMRC from them through the API platform, and receive information from HMRC Notice 700/22 §3.2 [PRIMARY] — Submission is future work
Submit endpoint: POST /organisations/vat/{vrn}/returns, body VATReturnDeclaration with periodKey (4 chars), vatDueSales, vatDueAcquisitions, totalVatDue (= sales + acquisitions), vatReclaimedCurrPeriod, netVatDue (≥ 0), totalValueSalesExVAT, totalValuePurchasesExVAT, totalValueGoodsSuppliedExVAT, totalAcquisitionsExVAT, finalised (must be true, else 403 NOT_FINALISED). Errors VAT_TOTAL_VALUE, VAT_NET_VALUE, INVALID_MONETARY_AMOUNT. Range ±9,999,999,999,999.99 (boxes 1–4), 0–99,999,999,999.99 (box 5), ±9,999,999,999,999 (6–9) HMRC Developer Hub, VAT (MTD) API 1.0 OAS (/api-documentation/docs/api/service/vat-api/1.0/oas/file) [PRIMARY] — khata_gb::mtd renders this body (no network)
Accept header application/vnd.hmrc.1.0+json; money "with two decimal places and GBP currency" unless documented HMRC Developer Hub reference guide [PRIMARY] — Future work (client)
OAuth 2.0 authorisation-code flow, scopes write:vat / read:vat; sandbox test-api.service.hmrc.gov.uk, production api.service.hmrc.gov.uk OAS securitySchemes [PRIMARY] — Future work
Fraud-prevention headers are required by law; for a desktop app connecting directly (Gov-Client-Connection-Method: DESKTOP_APP_DIRECT) all of: Gov-Client-Device-ID, -Local-IPs, -Local-IPs-Timestamp, -MAC-Addresses, -Multi-Factor, -Screens, -Timezone, -User-Agent, -User-IDs, -Window-Size, Gov-Vendor-License-IDs, Gov-Vendor-Product-Name, Gov-Vendor-Version. Repeated bad data can lead to fines and API blocking HMRC Developer Hub fraud-prevention guide and Desktop application direct page [PRIMARY]; legal basis linked as SI 2019/360 [PRIMARY link, text not read] — Future work; KhataOS is a desktop app (DESKTOP_APP_DIRECT, or VIA_SERVER if a relay is used)

1.7 Schemes and special regimes (pointers — not modelled)

Item Source What KhataOS does
Flat Rate Scheme: join at expected taxable turnover ≤ £150,000; leave above £230,000 GOV.UK VAT Flat Rate Scheme: eligibility [PRIMARY]; Notice 733 [not retrieved] Not modelled: the return uses standard accounting
Cash Accounting Scheme: ≤ £1.35m to join, leave above £1.6m GOV.UK VAT Cash Accounting Scheme: eligibility [PRIMARY]; Notice 731 Not modelled: VAT is by invoice date (tax point), not payment
Annual Accounting Scheme: ≤ £1.35m; one return a year, due 2 months after; advance payments GOV.UK VAT Annual Accounting Scheme [PRIMARY]; Notice 732; Notice 700/12 §5 Not modelled (any period can still be computed)
Postponed import VAT accounting (PVA): import VAT in Box 1, reclaim in Box 4, in the period of import, from the monthly postponed import VAT statement GOV.UK Completing your VAT Return to account for import VAT [PRIMARY] Not modelled: imports carry no VAT in the books unless posted
Domestic reverse charge for building and construction services (CIS), from 1 Mar 2021: the customer accounts for the VAT (Box 1 and Box 4); the supplier puts the net value in Box 6 GOV.UK Check when you must use the VAT domestic reverse charge for building and construction services; Revenue and Customs Brief 7 (2020); Notice 735 [PRIMARY] Not modelled
Other domestic reverse charges (mobile phones and computer chips, wholesale gas/electricity, emissions allowances…) Notice 735 [not retrieved in detail] Not modelled
Partial exemption, capital goods scheme, margin schemes, bad-debt relief, blocked input tax (business entertainment, cars) Notice 700 [not retrieved in detail] [UNCERTAIN] Not modelled: Box 4 takes all VAT on purchases as deductible
Northern Ireland goods trade with the EU (acquisitions, dispatches, EC Sales List) Notice 700/12 §3.3, §3.9, §3.10; GOV.UK NI pages [PRIMARY] Box 8 / Box 9 values from NI parties are worked out; acquisition VAT (Box 2) is not

2. Accounting periods, currency, records

Requirement Source What the software must do
Company year: a company's accounting reference date (ARD) is "the last day of the month in which the anniversary of their incorporation falls", and can be changed (form AA01). Any year end is possible GOV.UK Life of a company — Part 1: accounts [PRIMARY]; Companies Act 2006 s391–s392 [statutory reference] The books' first month is per company
Corporation Tax financial year: "A financial year starts on 1 April, and ends on the following 31 March", named after the calendar year it starts in HMRC Company Taxation Manual CTM01405 (Interpretation Act 1978 Sch 1) [PRIMARY] Default books year: 1 April – 31 March (the CT financial year, and a common company year end); companies change it to their ARD
Tax year for individuals: 6 April – 5 April Income Tax Act 2007 s4 [statutory reference, not retrieved → SECONDARY] Not the default: a sole trader can still pick April; 6 April starts are not supported by the month-based year model [UNCERTAIN whether needed]
Currency: sterling, 100 pence; the total VAT on an invoice must be "expressed in sterling" reg 14(1)(l) [PRIMARY] GBP, symbol "£", 2 decimals
Record keeping: "Generally, you must keep all your business records for VAT purposes for at least 6 years" Notice 700/21 §2.4 [PRIMARY]; VATA 1994 Sch 11 para 6(3) [statutory reference] Retention of 6 years (KhataOS never deletes posted vouchers)
Companies House accounts (pointers only): private companies file within 9 months of the ARD (public 6); first accounts within 21 months of incorporation; micro-entity thresholds for periods from 6 Apr 2025 (2 of: turnover ≤ £1m, balance sheet ≤ £500,000, ≤ 10 employees); from 1 Apr 2028 filing through software in iXBRL and micro-entities must deliver a profit and loss account GOV.UK Life of a company — Part 1 [PRIMARY] Not modelled. Accounts frameworks FRS 102 / FRS 105 (FRC) are pointers only [not retrieved]
Corporation Tax returns (CT600 with iXBRL accounts and computations) [not researched] Not modelled

3. Regions

The UK pack lists the four nations as address regions, with ISO 3166-2:GB codes (GB-ENG, GB-SCT, GB-WLS, GB-NIR) shortened to ENG, SCT, WLS, NIR [SECONDARY: ISO 3166-2:GB]. VAT rates do not differ by nation. Northern Ireland matters for goods: under the Windsor Framework NI follows EU VAT rules for goods, so NI-to-EU dispatches (Box 8) and EU-to-NI acquisitions (Box 2, Box 9) exist only for a business with goods in NI [PRIMARY: Notice 700/12 §3.3, §3.9, §3.10]. Scotland and Wales have devolved income-tax rates but no VAT difference.

4. Open items to verify before relying on the pack

  1. Whether HMRC still publishes, or will provide on request, the full Mod 97 / 97-55 specification; the implementation follows the 2009 forum minutes and slides and HMRC's worked example (§1.1–1.2).
  2. The GD/HA and 12-digit branch formats against a current HMRC source (only SECONDARY found).
  3. Whole-pound conversion for Boxes 6–9: truncation (KhataOS) vs rounding.
  4. Notice 700/21 §4.2 (GB prefix) vs reg 14(2)(b) (XI prefix) for NI → EU invoices.
  5. The midpoint direction for rounding VAT to the nearest penny (§17.5.1 does not say).
  6. Whether gap-free numbering is required, or only unique and sequential.
  7. Current MTD fraud-prevention header specification version before building a client.

5. Source list

6. Addendum (21 Oct 2026): reverse charges, import VAT and the schemes

Checked on gov.uk for the VAT-pack work (docs/uk-vat.md); all [PRIMARY] unless tagged. Box rules summarised in VAT Notice 700/12 §§3, 4 https://www.gov.uk/guidance/how-to-fill-in-and-submit-your-vat-return-vat-notice-70012.

6.1 Domestic reverse charge (Notice 735; construction)

  • Notice 735 https://www.gov.uk/guidance/the-vat-domestic-reverse-charge-procedure-notice-735: scope §3.1 (mobile phones, computer chips, wholesale gas and electricity, emissions allowances, wholesale telecoms, renewable energy certificates, construction), only between UK-registered businesses. Supplier §7.7: value in Box 6, "no output tax to include in box 1". Customer §8.5: output tax in Box 1, net value "must not be entered in box 6", input tax in Box 4 under the normal rules, value in Box 7. De minimis §6.1: on an invoice basis, phones/chips of £5,000 or more (VAT-exclusive) per invoice, "no exclusion for the first £5,000"; §6.2 mixed invoices split; §6.3 grouping only for one order over £5,000 by agreement. Invoice wording §7.6.1 ("reverse charge: VAT Act 1994 Section 55A applies" or "Customer to pay the VAT to HMRC").
  • Construction: https://www.gov.uk/guidance/vat-domestic-reverse-charge-for-building-and-construction-services, technical guide https://www.gov.uk/guidance/vat-reverse-charge-technical-guide, VATREVCON31000. Customer VAT in Box 1 and Box 4; "no impact on … boxes 6 and 7" (read with 700/12 §4.6: supplier Box 6, customer Box 7). Applies when the customer is VAT- and CIS-registered, the services are in CIS scope, standard or reduced rated, and no written end-user or intermediary notice was given; employment businesses supplying workers and items within a zero-rated supply excluded; 5% disregard by agreement, not per invoice. Reverse-charge supplies are "not to be accounted for under" the Flat Rate Scheme, and cash accounting cannot be used for them.

6.2 Imported services and import VAT

6.3 Flat Rate Scheme (Notice 733)

https://www.gov.uk/guidance/flat-rate-scheme-for-small-businesses-vat-notice-733--2 - Join: expected taxable turnover excluding VAT £150,000 or less (§3.1). Leave: income for the year over £230,000 including VAT (stay if the next 12 months will not exceed £191,500) (§3.5); also if the next 30 days alone exceed £230,000 (§12.2(b)); check on each anniversary (§12.3). - Flat rate turnover: "all the supplies your business makes, including VAT" (§6.2), including zero-rated and exempt income; excluded: bank interest, share income, non-business income, supplies outside the scope, goods not used in the business, capital goods sold where input tax was claimed (§6.3). Methods: basic (§8.1), cash-based (§9.1: "the VAT inclusive supplies for which you have been paid"), retailer's (§10); kept at least 12 months (§6.1). - Boxes (700/12 §4.1): Box 1 flat rate × turnover plus reverse-charge output VAT; Box 4 only capital goods; Box 6 the turnover the rate applied to, including VAT, plus the VAT-exclusive value of supplies outside the scheme (including reverse-charge transactions) and Box 8; Box 7 "usually no figure … unless you've bought a capital good costing more than £2,000", plus Box 9 and reverse-charge transactions; imports in Box 7 for scheme users [UNCERTAIN; included]. - Capital goods: a single purchase of capital expenditure goods costing £2,000 or more including VAT (§15.2); 700/12 says "more than £2,000" [conflict: 733 followed]. Not several purchases, items under £2,000 or services. - Imported services reverse charge: out of the flat rate turnover, Box 1 and Box 4 as under normal accounting (§6.4). PVA imports for periods from 1 June 2022: out of the turnover, import VAT added to Box 1 after the flat rate (§6.5). NI acquisitions: Box 2 at the standard rate, no recovery (§§6.4, 2.4). - First year: 1% off in the first 12 months after VAT registration, not if registered more than 12 months late (§4.7). - Limited cost business: 16.5% when relevant goods including VAT are under 2% of flat rate turnover, or over 2% but under £1,000 a year (£250 for a quarter) (§4.4); relevant goods exclude capital goods, food and drink, and services (§4.6). - Rates: https://www.gov.uk/vat-flat-rate-scheme/how-much-you-pay (54 sectors, catering 12.5, hotels 10.5 and pubs 6.5 from 1 Apr 2022; lower 2020-22 hospitality rates historical); trade-to-sector lookup FRS7200, FRS7300 https://www.gov.uk/hmrc-internal-manuals/vat-flat-rate-scheme/frs7200. The full table is in crates/khata-gb/src/schemes.rs (SECTORS).

6.4 Cash Accounting Scheme (Notice 731)

https://www.gov.uk/guidance/vat-cash-accounting-scheme-notice-731 - Join at expected taxable supplies £1.35m or less with no outstanding returns, offences or debt (§2.1); leave once 12-month supplies exceed £1.6m (§§2.5, 6.2; one-off exception §2.6). - VAT on the date of payment: cash on receipt; giro, standing order, direct debit when the bank is credited; card on the voucher date; cheques on the later of receipt (or sending) and the cheque's date; dishonoured payments reversed (§§4.4, 4.5). Boxes 1, 4, 6 and 7 on payments (§4.7; 700/12 §4.2: Box 6 "based on the payments you've had", Box 7 on payments made; Box 8 on supplies made). - Allocation: "You must allocate the payment to the invoices in the order in which you issue or receive them" (§5.7); a lump sum clears the earliest invoice first (§8.2). Payments on account are not covered further [UNCERTAIN; oldest-first used]. A part payment is VAT-inclusive and carries the invoice's VAT in proportion: £780 of £1,200 with £200 VAT is 65% → £130 (§8.1); mixed rates apportioned (§5.7; example §8.2, 45% of £3,400 → £180 VAT); foreign currency the same (§5.11). - Excluded: hire purchase, lease purchase, conditional and credit sale; imports and acquisitions (normal rules, import VAT in Box 4, 700/12 §4.2); the domestic reverse charge; invoices not payable in full within 6 months; invoices issued in advance of supply (§§2.7, 2.8, 5.5). Not with the Flat Rate Scheme (§2.8). Factoring §5.3, debt sale §5.4; bad debts §6.6; leaving §§6.4, 6.5.

6.5 Annual Accounting Scheme (Notice 732)

https://www.gov.uk/guidance/vat-annual-accounting-notice-732 - Join up to £1,350,000 taxable supplies (§2.1); leave over £1,600,000 (§2.4). Interim payments: 9 of 10% of last year's liability in months 4 to 12, or 3 of 25% in months 4, 7 and 10 (§§4.1, 4.2, 4.5); new registrants on an estimate; none for periods under 4 months (§3.4). Annual return "normally 2 months after the end of the annual accounting year" (§3.6); balancing payment = Box 5 − interim payments (700/12 §4.3). Combines with cash accounting and FRS (§§2.8, 9). No £2,000-style minimum found [UNCERTAIN]; electronic payment only [UNCERTAIN: search excerpt].