Dear {{lead.First Name:default=Subscriber}},

Partial Exemption Special Method (PESM) doesn’t have to be completed inside the Making Tax Digital process itself – HMRC allows spreadsheets to be used for this purpose – however, there are challenges to this approach:

  1. The VAT source to submission process must still be digitally linked– No form of manual adjustment in spreadsheets is allowed
  2. Spreadsheets are a common source of mistakeswith up to 88% containing errors
  3. Error checking– No digital audit trail or data cleansing, making it hard to track through adjustments and calculations for errors
  4. No proof of execution– Evidencing to HMRC that an agreed PESM methodology has been followed, down to the transaction level
  5. HMRC does not view the approach as best practice

AlphaVAT, our VAT compliance platform can help. We now cater for businesses operating a PESM scheme, with exact replication of bespoke PESM calculations and creation of digital audit trails from source to submission.