Historically, VAT returns for these clients have been prepared based on the supplier statements rather than the individual invoices. However, the concern until now has been that the Making Tax Digital (MTD) requirement relating to digital record keeping of supplies received required each supply received to be recorded individually – an onerous task.
However, HMRC has recently updated the MTD VAT Notice 700/22, and this point is specifically covered in paragraph 184.108.40.206. The update advises that while it remains HMRC’s view that best practice would be to digitally record the individual supplies to manage risk of missed or duplicated entries, they accept that additional work for a business in capturing individual supplies digitally could in itself lead to data entry errors. On that basis HMRC advise they can accept the recording of totals from a supplier statement where all the supplies on the statement relate to the same VAT period and the total VAT charged at each rate is shown.
If a business chooses this option, they are also required to cross-reference all supplies on the supplier statement to invoices received, but HMRC go on to confirm this can be done outside of the digital records.