Her Majesty’s Revenue and Customs (HMRC) are issuing advice to businesses on how to make better use of IT accounting software when filling out VAT forms.
HMRC say that if firms fully utilise software packages and follow their advice, then they could reduce mistakes by up to 25% and therefore increasing their compliance.
The new document, entitled PAS 76, is being launched by both HMRC and the British Standards Institute (BSI).
The advice aims to set out the ‘essential features’ that the two bodies believe should be incorporated into accounting software packages.
David Garlick, HMRC director of 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."
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."
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