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:
- The VAT source to submission process must still be digitally linked– No form of manual adjustment in spreadsheets is allowed
- Spreadsheets are a common source of mistakeswith up to 88% containing errors
- Error checking– No digital audit trail or data cleansing, making it hard to track through adjustments and calculations for errors
- No proof of execution– Evidencing to HMRC that an agreed PESM methodology has been followed, down to the transaction level
- 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.
