Compliance guide · UK
What HMRC requires for VAT registration, returns and digital records, and what that means when you choose or change an ERP.
Register when taxable turnover for the last 12 months is over £90,000, or is expected to pass that in the next 30 days. A business based outside the UK that supplies goods or services to the UK must register whatever its turnover.
A VAT Return is usually due every 3 months, even when nothing is owed. The filing deadline, and the date payment must reach HMRC, is usually one calendar month and 7 days after the period ends. Late returns earn penalty points for periods starting on or after 1 January 2023.
Some VAT records must be kept digitally: VAT on supplies made and received, the time and value of each supply, and adjustments to a return. Programs used together must be joined by digital links; copying and pasting between them by hand is not allowed.
VAT Returns must go through Making Tax Digital compatible software, or bridging software that connects other software such as spreadsheets to HMRC. HMRC has a search service for compatible products. A paper return can attract a penalty of up to £400 unless exempt.
Decide early where VAT records live and what files the return. If the ERP holds the transactions, plan the digital link to the filing product, test it on a full quarter and document the data flow. Choose software from HMRC’s search, not a supplier’s description.
It applies to sole traders and landlords, not limited companies. From 6 April 2026 it applies where qualifying income was over £50,000 in 2024 to 2025, then from 6 April 2027 over £30,000, and from 6 April 2028 over £20,000. Check the HMRC tool for your own position.
A business must register if taxable turnover for the last 12 months is over £90,000 (the VAT threshold) or is expected to pass £90,000 in the next 30 days. Voluntary below that. A business based outside the UK that supplies goods or services to the UK must register whatever its turnover.
Platform support: ERPNext, Odoo, SAP
Source: www.gov.uk
A VAT-registered business usually sends a VAT Return every 3 months, even when there is no VAT to pay or reclaim. The online deadline, and the deadline for payment to reach HMRC, is usually one calendar month and 7 days after the end of the accounting period.
Source: www.gov.uk
For accounting periods starting on or after 1 January 2023, each late VAT Return, including a nil return, earns a penalty point. Reaching the penalty point threshold for the accounting period brings a £200 penalty, and a further £200 for each later late return. Late payment is penalised separately.
Source: www.gov.uk
A VAT Return must be submitted using accounting software that is compatible with Making Tax Digital, unless the business is exempt or has cancelled its VAT registration. HMRC can charge a penalty of up to £400 for a paper VAT Return where the business is not exempt.
Platform support: ERPNext, Odoo, SAP
Source: www.gov.uk
Some VAT records must be kept digitally, including VAT on supplies made and received, the time and value of each supply and any adjustments to a return. Where several software products are used they must be linked digitally; copying and pasting data by hand is not allowed.
Platform support: ERPNext, Odoo, SAP
Source: www.gov.uk
VAT records must be kept for at least 6 years, or 10 years if the business uses the VAT One Stop Shop scheme or used the VAT Mini One Stop Shop scheme. Records start when the business registers for VAT.
Source: www.gov.uk
All VAT-registered businesses should now be signed up for Making Tax Digital for VAT. They must keep VAT records and file returns using compatible software, or bridging software that connects other software such as spreadsheets to HMRC. HMRC has a software search service.
Platform support: ERPNext, Odoo, SAP
Source: www.gov.uk
Sole traders and landlords registered for Self Assessment must use it from 6 April 2026 if qualifying income for 2024 to 2025 is over £50,000, from 6 April 2027 if over £30,000 for 2025 to 2026, and from 6 April 2028 if over £20,000 for 2026 to 2027. Partnerships follow later.
Source: www.gov.uk
Compatible software must create, store and correct digital records of self-employment and property income and expenses, send quarterly updates to HMRC, and submit the tax return by 31 January after the tax year. Bridging software can connect existing records such as spreadsheets.
Source: www.gov.uk
A summary for orientation only. It is not legal advice.
HMRC says VAT records must be kept and VAT Returns filed using compatible software or bridging software. Check the product, or the combination of products, in HMRC’s software search. We do not state which ERPs are compatible because we have not verified that.
HMRC allows spreadsheets to be part of the process only when they are connected to HMRC through bridging software and linked digitally to other records. Manual copy and paste between programs does not meet the digital link rule.
We design and configure the ERP, plan data links and migrate data. We do not give tax advice, file returns for you or confirm a tax treatment. Your accountant or tax adviser does that.
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