UK VAT Return

UK VAT Return Skill (VAT100) v2.0

Year applicability: Rules in this skill apply across 2024-25, 2025-26, and 2026-27 unless a specific section flags a year-dated change. The pack is read alongside the rate-bearing skills (uk-income-tax-sa100, uk-national-insurance, uk-dividends, etc.) which carry full 3-year tables.

Verified rates & thresholds (accountant-reviewed)

Reviewed against the cited tax authorities by James Power on 2026-06-03. Items flagged for further clarification are tracked separately and excluded here. This block is generated from verified skill_facts — edit the facts, not the prose.

VAT Return

• Standard rate — 20%
• Reduced rate — 5% (VATA 1994)
• Zero rate — 0% (VATA 1994)
• Registration threshold — £90,000 (rolling 12-month) (VATA 1994 Sch.1)
• Deregistration threshold — £88,000 (VATA 1994)
• FRS entry threshold — £150,000 (est. taxable excl. VAT) (FRS Order 2004)
• FRS exit threshold — £230,000 (total incl. VAT) (FRS Order 2004)
• Cash accounting entry — £1,350,000 (VAT Regs 1995)
• Cash accounting exit — £1,600,000 (VAT Regs 1995)
• Computer and IT consultancy — 14.5% (FRS Order 2004)
• Management consultancy — 14.0%
• Accountancy or bookkeeping — 14.5% (FRS Order 2004)
• Limited Cost Trader — 16.5% (FRS Order 2004)
• Quarterly deadline — 1 month + 7 days after period end (VATA 1994)
• MTD requirement — All VAT-registered: MTD-compatible software (MTD (VAT) Regs 2018)

Section 1 — Quick reference

Read this whole section before classifying anything. The workflow runbook is in vat-workflow-base Section 1 — follow that runbook with this skill providing the country-specific content.

Quick reference field table

Quick reference field table

Field	Value
Country	United Kingdom of Great Britain and Northern Ireland
Standard rate	20%
Reduced rate	5% (domestic fuel and power, children's car seats, energy-saving materials installed in residential property, smoking cessation products, women's sanitary products)
Zero rate	0% (most food, children's clothing and footwear, books and newspapers, public transport, new residential construction, exports, prescribed medicines)
Return form	VAT100 (9-box return)
Filing portal	HMRC VAT Online Services / MTD-compatible software (Xero, QuickBooks, FreeAgent, Sage, Kashflow, bridging software)
Authority	HM Revenue & Customs (HMRC)
Currency	GBP only
Filing frequencies	Quarterly (standard), Monthly (optional or required for regular repayment traders), Annual (annual accounting scheme)
Deadline	Quarterly/monthly: 1 month and 7 days after the end of the VAT period; Annual: 2 months after the year-end
Registration threshold	GBP 90,000 (rolling 12-month taxable turnover)
Deregistration threshold	GBP 88,000
FRS entry threshold	GBP 150,000 (estimated taxable turnover excl. VAT, next 12 months)
FRS exit threshold	GBP 230,000 (total business income incl. VAT)
Cash accounting threshold	GBP 1,350,000 (entry); GBP 1,600,000 (exit)
Primary legislation	Value Added Tax Act 1994 (VATA 1994)
Supporting legislation	VAT Regulations 1995 (SI 1995/2518); Finance Act 2024; Finance Act 2025; The Value Added Tax (Flat Rate Scheme) Order 2004; The VAT (Input Tax) Order 1992 (SI 1992/3222); Making Tax Digital (VAT) Regulations 2018
Companion skill (Tier 1, workflow)	vat-workflow-base v0.1 or later — MUST be loaded
Contributor	Open Accountants Community
Validated by	Verified by James Power on 2026-06-03
Validation date	Verified by James Power on 2026-06-03

Key VAT100 boxes (the boxes you will use most):

VAT100 Box table

Box	Meaning
1	VAT due on sales and other outputs (output VAT charged to customers; reverse charge VAT due; postponed import VAT)
2	VAT due on acquisitions from EU (legacy — post-Brexit generally use postponed import VAT in Box 1)
3	Total VAT due (Box 1 + Box 2) — automatic sum
4	VAT reclaimed on purchases and other inputs (input VAT on allowable business purchases; import VAT recoverable; reverse charge VAT recoverable)
5	Net VAT to pay or reclaim (Box 3 minus Box 4) — positive = pay HMRC, negative = HMRC refunds
6	Total value of sales and all other outputs excluding VAT (all outputs: standard, reduced, zero, exempt)
7	Total value of purchases and all other inputs excluding VAT (all inputs including exempt and zero-rated)
8	Total value of supplies of goods to EU excluding VAT (post-Brexit: exports of goods to EU)
9	Total value of acquisitions of goods from EU excluding VAT (post-Brexit: imports of goods from EU)

Conservative defaults — UK-specific values for the universal categories in vat-workflow-base Section 2:

Conservative defaults table

Ambiguity	Default
Unknown rate on a sale	20%
Unknown VAT status of a purchase	Not deductible
Unknown counterparty country	Domestic UK
Unknown B2B vs B2C status for overseas customer	B2C, charge 20%
Unknown business-use proportion (vehicle, phone, home office)	0% recovery
Unknown SaaS billing entity	Reverse charge from overseas (Box 6/7)
Unknown blocked-input status (entertainment, personal use)	Blocked
Unknown whether transaction is in scope	In scope
Unknown FRS Limited Cost Trader status	LCT at 16.5% (most conservative)

Red flag thresholds — country slot values for the reviewer brief in vat-workflow-base Section 3:

Red flag thresholds table

Threshold	Value
HIGH single-transaction size	GBP 5,000
HIGH tax-delta on a single conservative default	GBP 400
MEDIUM counterparty concentration	>40% of output OR input
MEDIUM conservative-default count	>4 across the return
LOW absolute net VAT position	GBP 10,000

Flat Rate Scheme — selected sector percentages (2025):

FRS sector percentages table

Sector	FRS %
Accountancy or bookkeeping	14.5%
Advertising	11.0%
Computer and IT consultancy	14.5%
Computer repair	10.5%
Estate agency or property management	12.0%
Journalism or photography	11.0%
Management consultancy	14.0%
Publishing	11.0%
Real estate	14.0%
Secretarial services	13.0%
Social worker	11.0%
Transport or storage	10.0%
Any other activity not listed	12.0%
Limited Cost Trader (any sector)	16.5%

• First-year discount — New VAT registrations get a 1% reduction in the FRS percentage for the first year.

Section 2 — Required inputs and refusal catalogue

Required inputs

• Minimum viable — Bank statement for the period in CSV, PDF, or pasted text. Must cover the full VAT period. Acceptable from any UK business bank: Barclays, HSBC UK, Lloyds, NatWest, Santander UK, Metro Bank, Starling, Monzo Business, Tide, Revolut Business, Wise Business, or any other.
• Recommended — Sales invoices for the period (especially for zero-rated exports and reverse charge services), purchase invoices for any input VAT claim above GBP 250, the client's VAT registration number (9-digit GB number), the prior period's VAT return (for Box 5 reconciliation and FRS comparison).
• Ideal — Complete invoice register, MTD-compatible digital records with digital links, reconciliation of prior period Box 5 position, confirmation of VAT scheme (standard, FRS, cash accounting, annual accounting).
• Refusal policy if minimum is missing — SOFT WARN. If no bank statement is available at all, hard stop. If bank statement only without invoices, proceed but record in the reviewer brief: "This VAT100 was produced from bank statement alone. The reviewer must verify, before approval, that input VAT claims above GBP 250 are supported by compliant tax invoices and that all reverse-charge classifications match the supplier's invoice."

UK-specific refusal catalogue

These refusals apply on top of any universal refusals in vat-workflow-base. If any trigger fires, stop, output the refusal message verbatim, end the conversation. Refusal is a safety mechanism.

• R-UK-1 — Partial exemption beyond de minimis — Trigger: client makes both taxable and exempt supplies and the exempt input VAT exceeds GBP 625 per month on average OR exceeds 50% of total input VAT. Message: "Your exempt input VAT exceeds the de minimis threshold. Partial exemption requires a formal calculation under the standard method (or a special method agreed with HMRC) including an annual adjustment. This is too fact-sensitive for this skill. Please use a qualified accountant (ACA/ACCA/CTA) to determine and confirm the recoverable proportion before input VAT is claimed."
• R-UK-2 — Transfer of a going concern (TOGC) — Trigger: the period contains a business transfer that may qualify as a TOGC under VATA 1994 s49. Message: "TOGCs are outside the scope of VAT but have strict conditions. Incorrect treatment can result in a significant VAT liability. Please use a qualified accountant to confirm TOGC status." (VATA 1994 s49)
• R-UK-3 — Margin scheme (second-hand goods, tour operators) — Trigger: client deals in second-hand goods under the margin scheme or is a tour operator using TOMS. Message: "Margin scheme transactions require transaction-level margin computation. Tour Operators' Margin Scheme (TOMS) requires a year-end calculation. Out of scope for this skill."
• R-UK-4 — CIS reverse charge complex — Trigger: the client receives or makes supplies of construction services within the Construction Industry Scheme where the end-user exemption, intermediary supplier status, or mixed supply classification is unclear. Message: "The CIS domestic reverse charge is fact-specific. End-user exemptions, intermediary supplier status, and mixed supply classification require professional judgement. Please confirm with a qualified accountant before applying or disapplying the reverse charge."
• R-UK-5 — VAT group — Trigger: client is part of a VAT group or asks about group registration under VATA 1994 s43. Message: "VAT groups require consolidation across all group members. Intra-group supplies are disregarded. Out of scope for this skill." (VATA 1994 s43)

Section 3 — Supplier pattern library (the lookup table)

This is the deterministic pre-classifier. When a transaction's counterparty matches a pattern in this table, apply the treatment from the table directly. Do not second-guess. Do not consult Tier 1 rules — the table is authoritative for patterns it covers.

How to read this table. Match by case-insensitive substring on the counterparty name as it appears in the bank statement. If multiple patterns match, use the most specific. If none match, fall through to Tier 1 rules in Section 5.

Post-Brexit note. Since 1 January 2021, EU suppliers are treated identically to non-EU suppliers for UK VAT purposes. There is no intra-EU acquisition regime for the UK. Services received from both EU and non-EU suppliers trigger the reverse charge under the same rules. Goods imported from any country (including EU) are subject to import VAT (postponed or at border).

3.1 UK banks (fees exempt — exclude)

UK banks pattern table

Pattern	Treatment	Notes
BARCLAYS, BARCLAYS BANK	EXCLUDE for bank charges/fees	Financial service, exempt
HSBC UK, HSBC BANK	EXCLUDE for bank charges/fees	Same
LLOYDS, LLOYDS BANK, LLOYDS TSB	EXCLUDE for bank charges/fees	Same
NATWEST, NATIONAL WESTMINSTER	EXCLUDE for bank charges/fees	Same
SANTANDER UK	EXCLUDE for bank charges/fees	Same
METRO BANK	EXCLUDE for bank charges/fees	Same
STARLING BANK	EXCLUDE for bank charges/fees	Same
MONZO, MONZO BANK	EXCLUDE for bank charges/fees	Same
TIDE, TIDE PLATFORM	EXCLUDE for bank charges/fees	Same
REVOLUT (fee lines), WISE (fee lines)	EXCLUDE for transaction/maintenance fees	Check for separate taxable subscription invoices
INTEREST, BANK INTEREST	EXCLUDE	Interest income/expense, out of scope
LOAN, BUSINESS LOAN, BOUNCE BACK LOAN	EXCLUDE	Loan principal movement, out of scope
OVERDRAFT FEE, ARRANGEMENT FEE	EXCLUDE	Exempt financial service

3.2 HMRC and government (exclude entirely)

HMRC and government pattern table

Pattern	Treatment	Notes
HMRC, HM REVENUE, HMRC VAT	EXCLUDE	Tax payment, not a supply
HMRC PAYE, HMRC NIC, HMRC CT	EXCLUDE	Tax payment
COMPANIES HOUSE, COMPANIES HSE	EXCLUDE	Statutory fee, not a supply
COUNCIL TAX, BUSINESS RATES	EXCLUDE	Local authority levy, outside scope
DVLA	EXCLUDE	Road tax, statutory fee
ICO, INFORMATION COMMISSIONER	Domestic 20%	Data protection fee — taxable supply, input VAT recoverable
TV LICENSING, BBC	EXCLUDE	Broadcasting licence, outside scope
LAND REGISTRY, HM LAND REGISTRY	EXCLUDE	Statutory fee

3.3 UK utilities

UK utilities pattern table

Pattern	Treatment	Box	Notes
BRITISH GAS, CENTRICA	5% domestic fuel / 20% commercial	Box 7 / Box 4	Domestic fuel and power = 5% reduced rate; commercial premises = 20%. Default: 5% unless confirmed commercial
EDF ENERGY, EDF	5% domestic fuel / 20% commercial	Box 7 / Box 4	Same
OCTOPUS ENERGY, BULB, OVO, SSE, SCOTTISH POWER, E.ON, NPOWER	5% domestic fuel / 20% commercial	Box 7 / Box 4	Same
THAMES WATER, SEVERN TRENT, UNITED UTILITIES, ANGLIAN WATER, WESSEX WATER, SOUTHERN WATER, YORKSHIRE WATER	0%	Box 7	Water supply is zero-rated in the UK
BT, BRITISH TELECOM, BT GROUP	Domestic 20%	Box 7 / Box 4	Telecoms, standard rated
SKY, SKY UK	Domestic 20%	Box 7 / Box 4	Telecoms/broadband, standard rated
VIRGIN MEDIA, VIRGIN MEDIA O2	Domestic 20%	Box 7 / Box 4	Telecoms/broadband, standard rated
VODAFONE, EE, THREE, O2	Domestic 20%	Box 7 / Box 4	Mobile telecoms, standard rated
OPENREACH	Domestic 20%	Box 7 / Box 4	Line rental, standard rated

3.4 UK insurance (exempt — exclude)

UK insurance pattern table

Pattern	Treatment	Notes
AVIVA, AVIVA INSURANCE	EXCLUDE	Insurance premium, exempt
DIRECT LINE, DIRECT LINE GROUP	EXCLUDE	Same
LEGAL & GENERAL, L&G	EXCLUDE	Same
ADMIRAL, ADMIRAL GROUP	EXCLUDE	Same
AXA UK, ZURICH UK, HISCOX	EXCLUDE	Same
RSA, MORE THAN, LV=	EXCLUDE	Same
INSURANCE, INSURANCE PREMIUM, IPT	EXCLUDE	All exempt (Insurance Premium Tax is outside VAT scope)
PROFESSIONAL INDEMNITY, PI INSURANCE	EXCLUDE	Exempt

3.5 UK transport

UK transport pattern table

Pattern	Treatment	Box	Notes
TFL, TRANSPORT FOR LONDON, OYSTER	0%	Box 7	Public transport, zero-rated
NATIONAL RAIL, TRAINLINE, GWR, LNER, AVANTI, SOUTHEASTERN, THAMESLINK	0%	Box 7	Rail fares, zero-rated
UBER UK, UBER BV	Domestic 20%	Box 7 / Box 4	Ride-hailing, standard rated. Uber invoices from NL entity — check if reverse charge applies
TAXI, ADDISON LEE, BOLT UK	Domestic 20%	Box 7 / Box 4	Taxi services, standard rated
BRITISH AIRWAYS, BA, EASYJET, RYANAIR (international flights)	0%	Box 7	International flights, zero-rated
PARKING, NCP, APCOA, RINGGO	Domestic 20%	Box 7 / Box 4	Car parking, standard rated

3.6 UK food and entertainment

UK food and entertainment pattern table

Pattern	Treatment	Notes
TESCO, SAINSBURYS, SAINSBURY'S, ASDA, MORRISONS, WAITROSE, ALDI, LIDL UK, CO-OP, M&S FOOD, MARKS AND SPENCER	Default BLOCK input VAT	Supermarket — personal provisioning. Deductible only if hospitality/catering business purchasing stock for resale
PRET, PRET A MANGER, COSTA, STARBUCKS, GREGGS, MCDONALDS, KFC, NANDOS, WAGAMAMA	Default BLOCK	Entertainment/personal. Client entertaining is blocked in UK (no exceptions). Staff entertainment may be recoverable — see Tier 2
DELIVEROO, JUST EAT, UBER EATS	Default BLOCK	Entertainment/personal consumption
RESTAURANTS, CAFES, BARS (any named restaurant)	Default BLOCK	Client entertainment VAT is blocked — VATA 1994 s25; VAT (Input Tax) Order 1992. Exception: entertaining overseas customers IS recoverable

3.7 SaaS — EU suppliers (reverse charge, Box 6/7)

Post-Brexit, EU suppliers are treated as overseas suppliers. Services received from EU-established businesses trigger the reverse charge. The UK recipient self-accounts: output VAT in Box 1 (and Box 6 for the net value), input VAT in Box 4 (and Box 7 for the net value). Net cash effect zero for a fully taxable business.

SaaS EU suppliers pattern table

Pattern	Billing entity	Box	Notes
GOOGLE (Ads, Workspace, Cloud)	Google Ireland Ltd (IE)	Box 1+6 / Box 4+7	Reverse charge — post-Brexit, IE is overseas
MICROSOFT (365, Azure)	Microsoft Ireland Operations Ltd (IE)	Box 1+6 / Box 4+7	Reverse charge
ADOBE	Adobe Systems Software Ireland Ltd (IE)	Box 1+6 / Box 4+7	Reverse charge
META, FACEBOOK ADS	Meta Platforms Ireland Ltd (IE)	Box 1+6 / Box 4+7	Reverse charge
LINKEDIN (paid)	LinkedIn Ireland Unlimited (IE)	Box 1+6 / Box 4+7	Reverse charge
SPOTIFY	Spotify AB (SE)	Box 1+6 / Box 4+7	Reverse charge
DROPBOX	Dropbox International Unlimited (IE)	Box 1+6 / Box 4+7	Reverse charge
SLACK	Slack Technologies Ireland Ltd (IE)	Box 1+6 / Box 4+7	Reverse charge
ATLASSIAN (Jira, Confluence)	Atlassian Network Services BV (NL)	Box 1+6 / Box 4+7	Reverse charge
ZOOM	Zoom Video Communications Ireland Ltd (IE)	Box 1+6 / Box 4+7	Reverse charge
STRIPE (subscription fees)	Stripe Technology Europe Ltd (IE)	Box 1+6 / Box 4+7	Transaction fees may be exempt — see 3.9
XERO	Xero UK Ltd (UK entity)	Domestic 20% Box 7/4	Xero bills from UK entity — standard domestic, NOT reverse charge

3.8 SaaS — non-EU suppliers (reverse charge, Box 6/7)

Post-Brexit, both EU and non-EU suppliers trigger the same reverse charge mechanism. The distinction is academic for UK VAT purposes but listed separately for clarity of billing entity.

SaaS non-EU suppliers pattern table

Pattern	Billing entity	Box	Notes
AWS, AMAZON WEB SERVICES	Amazon Web Services Inc (US) or AWS EMEA SARL (LU)	Box 1+6 / Box 4+7	Reverse charge. Check invoice — LU entity is also overseas post-Brexit
NOTION	Notion Labs Inc (US)	Box 1+6 / Box 4+7	Reverse charge
ANTHROPIC, CLAUDE	Anthropic PBC (US)	Box 1+6 / Box 4+7	Reverse charge
OPENAI, CHATGPT	OpenAI Inc (US)	Box 1+6 / Box 4+7	Reverse charge
GITHUB	GitHub Inc (US)	Box 1+6 / Box 4+7	Check if billed by IE entity — still reverse charge post-Brexit
FIGMA	Figma Inc (US)	Box 1+6 / Box 4+7	Reverse charge
CANVA	Canva Pty Ltd (AU)	Box 1+6 / Box 4+7	Reverse charge
HUBSPOT	HubSpot Inc (US) or HubSpot Ireland Ltd (IE)	Box 1+6 / Box 4+7	Reverse charge either way post-Brexit
TWILIO	Twilio Inc (US)	Box 1+6 / Box 4+7	Reverse charge
APPLE (App Store, iCloud)	Apple Distribution International Ltd (IE)	Box 1+6 / Box 4+7	Reverse charge post-Brexit
MAILCHIMP, INTUIT MAILCHIMP	Intuit Inc (US) or The Rocket Science Group LLC (US)	Box 1+6 / Box 4+7	Reverse charge

3.9 Payment processors (fees exempt — exclude)

Payment processors pattern table

Pattern	Treatment	Notes
STRIPE (transaction fees)	EXCLUDE (exempt)	Payment processing fees are exempt financial services
STRIPE (monthly subscription)	Reverse charge Box 1+6 / Box 4+7	Stripe IE entity — separate from exempt transaction fees
PAYPAL (transaction fees)	EXCLUDE (exempt)	Same — exempt financial services
GOCARDLESS	EXCLUDE (exempt)	Direct debit processing fees, exempt financial service
SUMUP, SQUARE, ZETTLE, IZETTLE	Check invoice	If UK entity: domestic 20%; if IE/EU entity: reverse charge. Transaction fees are exempt; hardware/subscription may be taxable
WORLDPAY, BARCLAYCARD MERCHANT	EXCLUDE (exempt)	Merchant service fees, exempt

3.10 Professional services (UK domestic 20%)

Professional services pattern table

Pattern	Treatment	Box	Notes
Accountant names, ACCOUNTANT, CPA, ACCA, ACA, ICAEW, BOOKKEEPER	Domestic 20%	Box 7 / Box 4	Always deductible
Solicitor names, SOLICITOR, LAWYER, LAW FIRM, LLP	Domestic 20%	Box 7 / Box 4	Deductible if business legal matter. Disbursements may be zero-rated or exempt
BARRISTER, COUNSEL, QC, KC	Domestic 20%	Box 7 / Box 4	Standard rated professional services

3.11 Property and rent

Property and rent pattern table

Pattern	Treatment	Notes
RENT (commercial, with VAT on invoice)	Domestic 20%	Commercial lease where landlord has opted to tax — Box 7 / Box 4
RENT (residential, no VAT)	EXCLUDE	Residential lease is exempt — no input VAT recovery
GROUND RENT, SERVICE CHARGE (residential)	EXCLUDE	Exempt
COMMERCIAL RENT, OFFICE RENT, REGUS, WEWORK, IWGSERVICED OFFICE	Domestic 20%	Serviced offices typically charge 20%

3.12 Payroll and statutory payments (exclude entirely)

Payroll and statutory payments pattern table

Pattern	Treatment	Notes
PAYE, PAY AS YOU EARN	EXCLUDE	Income tax remittance to HMRC
NIC, NATIONAL INSURANCE, EMPLOYERS NI	EXCLUDE	Statutory contribution, outside scope
SALARY, WAGES, NET PAY	EXCLUDE	Staff costs, outside VAT scope
PENSION, NEST, WORKPLACE PENSION, AUTO ENROLMENT	EXCLUDE	Pension contributions, outside scope
SSP, SMP, STATUTORY PAY	EXCLUDE	Statutory payments, outside scope

Section 4 — Worked examples

These are six fully worked classifications drawn from a hypothetical bank statement of a UK-based self-employed IT consultant. They illustrate the trickiest cases. Pattern-match against these when you encounter similar lines in any real statement.

Example 1 — Overseas SaaS reverse charge (Notion)

Input line: 03.04.2025 ; NOTION LABS INC ; DEBIT ; Monthly subscription ; USD 16.00 ; GBP 12.80

Reasoning: Notion Labs Inc is a US entity (Section 3.8). No VAT on the invoice. This is a service received from an overseas supplier. The UK recipient self-accounts for VAT under the reverse charge. Output VAT goes to Box 1 (GBP 2.56 = 12.80 x 20%) and Box 6 (GBP 12.80 net). Input VAT goes to Box 4 (GBP 2.56) and Box 7 (GBP 12.80 net). Net cash effect zero for a fully taxable business.

Output table

Date	Counterparty	Gross	Net	VAT	Rate	Box (output)	Box (input)	Default?	Question?	Excluded?
03.04.2025	NOTION LABS INC	-12.80	-12.80	2.56	20%	Box 1+6	Box 4+7	N	—	—

Example 2 — EU service, reverse charge post-Brexit (Google Ads)

Input line: 10.04.2025 ; GOOGLE IRELAND LIMITED ; DEBIT ; Google Ads April 2025 ; -850.00 ; GBP

Reasoning: Google Ireland Limited is an IE entity. Post-Brexit, Ireland is overseas for UK VAT purposes — same treatment as any non-UK supplier. Reverse charge applies. Output VAT = GBP 170.00 (850 x 20%) to Box 1. Net GBP 850 to Box 6. Input VAT GBP 170.00 to Box 4. Net GBP 850 to Box 7. Net cash effect zero.

Output table

Date	Counterparty	Gross	Net	VAT	Rate	Box (output)	Box (input)	Default?	Question?	Excluded?
10.04.2025	GOOGLE IRELAND LIMITED	-850.00	-850.00	170.00	20%	Box 1+6	Box 4+7	N	—	—

Example 3 — Client entertainment, fully blocked

Input line: 15.04.2025 ; THE IVY RESTAURANT LONDON ; DEBIT ; Business dinner ; -220.00 ; GBP

Reasoning: Restaurant transaction. Client entertainment input VAT is fully blocked under VATA 1994 s25 and the VAT (Input Tax) Order 1992. Unlike some jurisdictions, the UK has no partial recovery for business meals with clients. The one exception: entertaining overseas customers IS recoverable. Default: full block unless confirmed overseas customer entertainment. The net value still goes to Box 7, but no VAT to Box 4.

Output table

Date	Counterparty	Gross	Net	VAT	Rate	Box (output)	Box (input)	Default?	Question?	Excluded?
15.04.2025	THE IVY RESTAURANT	-220.00	-183.33	0	—	—	Box 7 only	Y	Q1	"Entertainment: blocked. Was this entertaining overseas customers?"

Example 4 — Domestic fuel (5% reduced rate)

Input line: 18.04.2025 ; BRITISH GAS ; DEBIT ; Direct debit gas bill ; -95.00 ; GBP

Reasoning: Domestic fuel and power attracts the 5% reduced rate. If this is the client's home and they work from home, only the business-use proportion is recoverable. Default: 0% business use unless the client specifies a proportion. The gross amount includes 5% VAT: net = 95.00 / 1.05 = GBP 90.48, VAT = GBP 4.52.

Output table

Date	Counterparty	Gross	Net	VAT	Rate	Box (output)	Box (input)	Default?	Question?	Excluded?
18.04.2025	BRITISH GAS	-95.00	-90.48	0	5%	—	Box 7	Y	Q2	"Home office: what % of this property is used for business?"

Example 5 — Zero-rated export sale

Input line: 22.04.2025 ; ACME CORP INC NEW YORK ; CREDIT ; Invoice UK-2025-018 IT consultancy March ; +5,000.00 ; GBP

Reasoning: Incoming payment from a US company. B2B services to an overseas customer — place of supply is the customer's country (US) under the general rule. The client invoices at 0% (outside the scope of UK VAT). Report net amount in Box 6 (total outputs). No output VAT in Box 1. Confirm: (a) customer is a business, not a consumer; (b) the invoice shows no UK VAT with a note that the supply is outside the scope of UK VAT.

Output table

Date	Counterparty	Gross	Net	VAT	Rate	Box (output)	Box (input)	Default?	Question?	Excluded?
22.04.2025	ACME CORP INC	+5,000.00	+5,000.00	0	0%	Box 6	—	Y	Q3 (HIGH)	"Verify: is this a B2B supply? Confirm customer is a business."

Example 6 — Flat Rate Scheme computation

Input line: Quarter total: gross (VAT-inclusive) turnover GBP 30,000. FRS sector: IT consultancy (14.5%). Goods purchased in quarter: GBP 200.

Reasoning: First check the Limited Cost Trader test. Goods spend = GBP 200. 2% of GBP 30,000 = GBP 600. GBP 200 < GBP 600, and GBP 200 < GBP 1,000 annualised. Client IS a Limited Cost Trader. Rate = 16.5%, not 14.5%. VAT payable = 30,000 x 16.5% = GBP 4,950. Under standard accounting: output VAT = GBP 5,000 (30,000 / 1.2 x 0.2), input VAT recovery would need to exceed GBP 50 to beat FRS. At 16.5% LCT, FRS is almost certainly worse than standard accounting. Flag for reviewer.

Output table

Field	Value
FRS sector rate	14.5%
LCT test	FAIL — goods spend GBP 200 < 2% of GBP 30,000 (GBP 600)
Applied rate	16.5% (LCT)
Box 1	GBP 4,950
Box 6	GBP 25,000 (net of VAT)
Reviewer flag	"LCT rate 16.5% applied. Client may be better off on standard accounting."

Section 5 — Tier 1 classification rules (compressed)

Each rule states the legal source and the box mapping. Apply silently if the data is unambiguous. For full doctrinal context, see the source citations in Section 10.

5.1 Standard rate 20% (VATA 1994 s2(1), Schedule 7A)

• Standard rate default — Default rate for any taxable supply unless a reduced rate, zero rate, or exemption applies. Most goods and services, professional fees, software, electronics, commercial property (where opted to tax). Sales output VAT to Box 1. Net sales to Box 6. Purchase input VAT to Box 4. Net purchases to Box 7. (VATA 1994 s2(1), Schedule 7A)

5.2 Reduced rate 5% (VATA 1994 Schedule 7A)

• Reduced rate scope — Applies to: domestic fuel and power (gas, electricity for domestic use), children's car seats, energy-saving materials installed in residential property, smoking cessation products, contraceptive products, women's sanitary products (from January 2021). Purchases at 5%: extract VAT at 5/105 of the gross. Box 7 for net, Box 4 for input VAT (subject to business-use proportion for home office). (VATA 1994 Schedule 7A)

5.3 Zero rate 0% (VATA 1994 Schedule 8)

• Zero rate scope — Applies to: most food (not catering, not hot takeaway, not confectionery, not alcohol, not soft drinks), children's clothing and footwear, books and newspapers (print and digital since May 2020), public transport fares, new residential construction (first grant of a major interest), exports of goods, prescribed medicines, water supply. Sales: no output VAT, but net value goes to Box 6. Purchases: no input VAT to claim, but net value goes to Box 7. Input VAT on costs attributable to zero-rated supplies IS recoverable. (VATA 1994 Schedule 8)

Key rate traps:

Key rate traps table (VATA 1994 Schedule 8)

Item	Rate	Trap
Hot takeaway food	20%	NOT zero-rated like cold food
Chocolate biscuits	20%	Standard-rated confectionery
Plain biscuits	0%	Zero-rated
Jaffa Cakes	0%	Classified as cakes (zero-rated), not chocolate biscuits
E-books and digital newspapers	0%	Zero-rated since 1 May 2020
Catering (hot or cold)	20%	Standard-rated even if the food itself would be zero-rated
Ice cream	20%	Standard-rated confectionery
Fruit juice	20%	Standard-rated (soft drink, not food)
Bottled water	0%	Zero-rated (water)
Takeaway cold sandwich	0%	Zero-rated (cold, not catering premises)
Coffee beans (unroasted)	0%	Zero-rated (food ingredient)
Hot coffee drink	20%	Standard-rated (hot beverage, catering)

5.4 Exempt supplies (VATA 1994 Schedule 9)

• Exempt supplies scope — No VAT charged, no input VAT recovery on attributable costs. Exempt supplies: insurance, financial services (interest, foreign exchange, securities dealing), education (by eligible bodies), health services (by registered practitioners), burial and cremation, postal services (Royal Mail universal service), land and property (unless opted to tax), membership subscriptions (certain professional bodies), betting and gaming. If exempt supplies are significant, partial exemption rules apply — R-UK-1 refuses if beyond de minimis. (VATA 1994 Schedule 9)

5.5 Outside scope (exclude from all boxes)

• Outside scope items — Wages, salaries, dividends, donations, non-business activities, statutory fees (road tax, council tax, business rates), HMRC tax payments, loan principal, drawings, internal transfers. Do NOT include in Box 6 or Box 7.

5.6 Reverse charge — services received from overseas suppliers

• Reverse charge overseas services — Post-Brexit, all non-UK suppliers (whether EU or non-EU) trigger the same reverse charge mechanism for services. The UK recipient self-accounts at 20%: output VAT to Box 1, net value to Box 6; input VAT to Box 4, net value to Box 7. Net cash effect zero for a fully taxable business. If the overseas supplier incorrectly charged their local VAT (e.g. Irish 23%), that foreign VAT is NOT recoverable as UK input tax — treat as a cost.

5.7 Reverse charge — CIS construction (VATA 1994 s55A)

• CIS reverse charge rules — For specified construction services between VAT-registered, CIS-registered businesses where the customer makes onward supplies of construction services: the customer (not the supplier) accounts for VAT. Supplier invoices net with annotation "Reverse charge: Customer to account to HMRC for VAT on this supply." Customer: output VAT to Box 1, input VAT to Box 4, net value to Box 7 only (not Box 6 — this is the customer's input, not output). End-user exemption: does NOT apply if the customer is an end user or intermediary supplier. (VATA 1994 s55A)

5.8 Input VAT — blocked categories (VATA 1994 s25; VAT (Input Tax) Order 1992)

• Blocked categories — The following input VAT CANNOT be reclaimed: - Business entertainment: entertaining UK customers, suppliers, or other business contacts. Exception: entertaining overseas customers IS recoverable - Motor cars: VAT on purchase or lease of cars NOT exclusively for business use. Exception: 100% business use (pool car, driving instructor car, taxi) = fully recoverable - Car fuel (private element): if car has any private use, full input VAT on fuel is blocked UNLESS the fuel scale charge is applied - Non-business expenditure: expenditure not wholly for business purposes Partially recoverable items: - Mobile phones: fully recoverable if business contract (even if some private use) - Home office costs: apportion business vs private — recover business element only - Mixed-use equipment: apportion on reasonable basis (VATA 1994 s25; VAT (Input Tax) Order 1992)

5.9 Bad debt relief (VATA 1994 s36; VAT Regulations 1995 reg 168-172)

• Bad debt relief rules — If a customer does not pay, the supplier can reclaim the output VAT already paid to HMRC. Conditions: debt at least 6 months old (from later of due date or supply date), debt written off in accounts, claim on VAT return for the period conditions are met, claim within 4 years 6 months of supply date. Relief amount added to Box 4. If customer later pays, relief must be reversed. (VATA 1994 s36; VAT Regulations 1995 reg 168-172)

5.10 Flat Rate Scheme (VATA 1994 s26B)

• Flat Rate Scheme rules — Business charges 20% on invoices, pays HMRC a flat percentage of gross (VAT-inclusive) turnover. Key rule: ALWAYS run the Limited Cost Trader test first. If goods spend < 2% of gross turnover (or < GBP 1,000/year if greater), rate is 16.5% regardless of sector. "Relevant goods" excludes: capital goods over GBP 2,000, food/drink for staff, vehicles/fuel/vehicle parts. Under FRS, input VAT on capital goods costing GBP 2,000 or more (incl. VAT) CAN be reclaimed separately in Box 4. (VATA 1994 s26B)

5.11 Cash accounting scheme (VAT Regulations 1995 reg 56-65)

• Cash accounting rules — Account for VAT based on date of payment, not invoice date. Entry: estimated taxable turnover <= GBP 1,350,000. Exit: GBP 1,600,000. Built-in bad debt relief — no output VAT due on unpaid invoices. (VAT Regulations 1995 reg 56-65)

5.12 Filing deadlines and penalties (Finance Act 2021, from Jan 2023)

• Filing deadlines and penalties — Late submission: points-based. Quarterly filers: penalty threshold at 4 points (GBP 200 per late return once threshold reached). Points expire after 12 months of compliance. Late payment: no penalty for 1-15 days late; 2% of outstanding VAT at day 16-30; additional 2% at day 31+ plus daily rate of 4% per annum. Late payment interest: Bank of England base rate + 2.5%. (Finance Act 2021)

5.13 MTD requirements (all VAT-registered businesses since April 2022)

• MTD requirements — Must keep digital records, maintain digital links between software systems (no manual re-keying), and file via MTD-compatible software. HMRC's basic online portal is NOT compliant with MTD.

Section 6 — Tier 2 catalogue (compressed)

For each ambiguity type: pattern, why the bank statement is insufficient, conservative default, question for the structured form.

6.1 Vehicle costs (fuel — business or private?)

• Vehicle costs ambiguity — Pattern: BP, SHELL, ESSO, TEXACO, TESCO FUEL, ASDA FUEL, fuel receipts. Why insufficient: vehicle type and business-use proportion unknown. If car with any private use → fuel input VAT blocked unless fuel scale charge applied. If van or commercial vehicle used exclusively for business → fully deductible. Default: 0% recovery. Question: "Is this fuel for a car (with private use — blocked) or a commercial vehicle used exclusively for business? Do you apply the fuel scale charge?"

6.2 Entertainment (client entertaining — blocked in UK)

• Entertainment ambiguity — Pattern: any named restaurant, cafe, bar, catering, hospitality. Why insufficient: client entertainment is blocked. Staff entertainment may be recoverable. Overseas customer entertainment IS recoverable. Default: block. Question: "Was this (a) entertaining a UK client/supplier (blocked), (b) entertaining an overseas customer (recoverable), or (c) a staff event (recoverable if not excessive)?"

6.3 Home office (electricity/gas — 5% domestic rate, but what % is office?)

• Home office ambiguity — Pattern: energy supplier names, BRITISH GAS, EDF, OCTOPUS, etc. Why insufficient: business proportion unknown. Domestic fuel is 5% VAT, but only the business-use percentage is recoverable. Default: 0% if mixed use without declared proportion, 100% if confirmed dedicated business premises. Question: "Is this a home office or a dedicated business premises? If home office, what percentage of the property is used exclusively for business? (Typical range: 10-25%)"

6.4 Cash withdrawals

• Cash withdrawals ambiguity — Pattern: ATM, CASH WITHDRAWAL, CASHPOINT. Why insufficient: unknown what cash was spent on. Default: exclude as owner drawing. Question: "What was the cash used for?"

6.5 Amazon/eBay (business or personal?)

• Amazon/eBay ambiguity — Pattern: AMAZON, AMAZON.CO.UK, AMAZON MARKETPLACE, AMZN, EBAY. Why insufficient: could be business stock/supplies or personal purchases. Amazon UK charges 20% VAT on most items. Default: block (personal). Question: "Was this a business purchase? If so, what was bought and do you have a VAT invoice?"

6.6 Mobile phone (business % unknown)

• Mobile phone ambiguity — Pattern: VODAFONE, EE, THREE, O2, GiffGaff, MOBILE. Why insufficient: if the contract is in the business name, full input VAT is recoverable even with some private use. If personal contract used partly for business, only business proportion is recoverable. Default: 0% recovery (personal contract assumed). Question: "Is this a business contract in the business name, or a personal phone used for business?"

6.7 FRS Limited Cost Trader test (did goods spend exceed 2%?)

• FRS LCT test ambiguity — Pattern: any FRS client. Why insufficient: bank statement shows total spend but not whether individual purchases are "relevant goods" vs services/excluded items. Default: LCT at 16.5% (most conservative). Question: "For the FRS Limited Cost Trader test: how much did you spend on goods (physical items used exclusively for business, excluding capital goods over GBP 2,000, food/drink for staff, vehicles/fuel/vehicle parts) this quarter?"

6.8 Round-number incoming transfers from owner-named counterparties

• Owner transfers ambiguity — Pattern: large round credit from a name matching the client's name. Why insufficient: could be a customer sale, owner injection, or family loan. Default: exclude as owner injection. Question: "The GBP X transfer from [name] — is this a customer payment, your own money going in, or a loan?"

6.9 Incoming transfers from individual names (not owner)

• Individual incoming transfers ambiguity — Pattern: incoming from private-looking counterparties. Why insufficient: could be B2C sale, B2B sale paid from personal account, refund. Default: domestic B2C sale at 20%, Box 6/1. Question: "For each: was it a sale? Business or consumer customer?"

6.10 Outgoing transfers to individuals

• Outgoing transfers ambiguity — Pattern: outgoing to private-looking names. Why insufficient: could be contractor with invoice, wages, refund, drawings. Default: exclude as drawings. Question: "Was this a contractor you paid with an invoice, wages, a refund to a customer, or a personal transfer?"

6.11 Rent payments

• Rent payments ambiguity — Pattern: monthly RENT, LEASE to a landlord-sounding counterparty. Why insufficient: commercial vs residential, whether landlord has opted to tax. Default: no VAT, no deduction (residential default). Question: "Is this a commercial property? Does the landlord charge VAT on the rent (they will only charge VAT if they have opted to tax the property)?"

6.12 Foreign hotel and accommodation (non-UK)

• Foreign hotel ambiguity — Pattern: hotel or accommodation charged abroad. Why insufficient: place of supply is the location of the property — non-UK VAT paid at source, not recoverable as UK input tax. Default: exclude from input VAT. Question: "Was this a business trip?" (For income tax records, the expense may still be deductible.)

6.13 Platform sales (Amazon Seller, eBay, Etsy)

• Platform sales ambiguity — Pattern: incoming from Amazon Payments, Etsy Payments, PayPal, Stripe — settlement payouts. Why insufficient: aggregated settlement may include multi-country buyer mix. Default: treat gross as Box 6/1 at 20%. Platform fees as separate reverse charge (IE/US entity). Question: "Do you sell to buyers outside the UK? Total overseas sales for the year? Do you sell on Amazon EU marketplaces?"

Section 7 — Excel working paper template (UK-specific)

The base specification is in vat-workflow-base Section 3. This section provides the UK-specific overlay.

Sheet "Transactions"

Columns A-L per the base. Column H ("Box code") accepts only valid UK VAT100 box codes: 1, 2, 4, 6, 7, 8, 9. Use blank for excluded transactions. For reverse-charge transactions, enter the output and input boxes separated by a slash (e.g. "1+6/4+7").

Sheet "Box Summary"

One row per box. Column A is the box number, column B is the description, column C is the value computed via formula. Mandatory rows:

| 1  | VAT due on sales and other outputs | =SUMIFS for output VAT entries |
| 2  | VAT due on EU acquisitions (legacy) | Generally 0 post-Brexit |
| 3  | Total VAT due | =Box1+Box2 |
| 4  | VAT reclaimed on purchases | =SUMIFS for input VAT entries |
| 5  | Net VAT to pay or reclaim | =Box3-Box4 |
| 6  | Total value of sales ex VAT | =SUMIFS for all output net values |
| 7  | Total value of purchases ex VAT | =SUMIFS for all input net values |
| 8  | Supplies of goods to EU ex VAT | =SUMIFS for EU goods exports |
| 9  | Acquisitions of goods from EU ex VAT | =SUMIFS for EU goods imports |

Sheet "Return Form"

Final VAT100-ready figures. The bottom-line cell is Box 5:

IF Box 5 > 0: taxpayer PAYS this amount to HMRC
IF Box 5 < 0: HMRC REFUNDS this amount to the taxpayer

FRS Sheet (if applicable)

If client is on FRS, add a separate sheet:

| Gross turnover (VAT-inclusive) | =SUM of all VAT-inclusive sales |
| Sector rate | [from Section 1 table] |
| LCT test: goods spend | [manual entry] |
| LCT test: 2% of gross | =Gross*2% |
| LCT status | =IF(goods_spend < MAX(2%_of_gross, 250), "LCT", "Not LCT") |
| Applied rate | =IF(LCT, 16.5%, sector_rate) |
| VAT payable (Box 1) | =Gross * applied_rate |
| Capital goods input VAT (Box 4) | [if any item >= GBP 2,000 incl VAT] |
| Box 5 | =Box1 - Box4 |

Color and formatting conventions

Per the xlsx skill: blue for hardcoded values from the bank statement, black for formulas, green for cross-sheet references, yellow background for any row where Default? = "Y".

Mandatory recalc step

After building the workbook, run:

python /mnt/skills/public/xlsx/scripts/recalc.py /mnt/user-data/outputs/uk-vat-<period>-working-paper.xlsx

Check the JSON output. If status is errors_found, fix the formulas and re-run. If status is success, present via present_files.

Section 8 — UK bank statement reading guide

Follow the universal exclusion rules in vat-workflow-base Step 6, plus these UK-specific patterns.

CSV format conventions. UK banks export in various formats. Barclays: CSV with DD/MM/YYYY. HSBC UK: CSV or QIF. Lloyds: CSV with DD/MM/YYYY. NatWest: CSV or OFX. Starling: CSV with ISO dates. Monzo: CSV with ISO dates. Tide: CSV with DD/MM/YYYY. Common columns: Date, Description/Narrative, Debit/Credit or Amount, Balance. Always confirm which format before parsing.

Internal transfers and exclusions. Own-account transfers between the client's bank accounts. Labelled "transfer to savings", "internal transfer", "own account". Always exclude.

Sole trader drawings. A self-employed sole trader cannot pay themselves wages. Any transfer to their personal account is a drawing — exclude from VAT.

Refunds and reversals. Identify by "refund", "reversal", "chargeback", "credit note". Book as a negative in the same box as the original transaction. Correction is in the period the refund is booked, not by amending the original period.

Foreign currency transactions. Convert to GBP at the transaction date rate. Use the HMRC exchange rate for the period, or the rate shown on the bank statement. Note the rate used in the Transactions sheet column L (Notes).

Cryptic card transactions. Card purchases with only a merchant terminal code or card acquirer reference. If the counterparty cannot be identified from the description, ask the client. Do not classify unidentified transactions.

Direct debit references. Many UK bank statements show direct debits with only a mandate reference number. Cross-reference with the client's known suppliers. Common: energy suppliers, telecoms, HMRC, insurance.

Section 9 — Onboarding fallback (only when inference fails)

The workflow in vat-workflow-base Section 1 mandates inferring the client profile from the data first and only confirming with the client as a fallback. The questionnaire below is a fallback — ask only the questions the data could not answer.

9.1 Entity type and trading name

• Entity type inference — Inference rule: sole trader names match the account holder name; company names end in "Ltd", "Limited", "LLP", "PLC". Fallback question: "Are you a self-employed sole trader, a limited company, or a partnership?"

9.2 VAT scheme

• VAT scheme inference — Inference rule: if the client mentions FRS, flat rate, or a percentage of turnover, they are FRS. If they mention cash basis or payment dates, they are cash accounting. Otherwise assume standard accrual. Fallback question: "Which VAT scheme are you on: standard accounting, Flat Rate Scheme, cash accounting, or annual accounting?"

9.3 VAT number

• VAT number inference — Inference rule: GB VAT numbers sometimes appear in invoice descriptions or payment references. Fallback question: "What is your VAT registration number? (9-digit GB number)"

9.4 Filing period

• Filing period inference — Inference rule: first and last transaction dates on the bank statement. Standard is quarterly. Fallback question: "Which VAT quarter does this cover? (e.g. April-June 2025)"

9.5 Industry and sector

• Industry inference — Inference rule: counterparty mix, sales description patterns, invoice descriptions. IT, consultancy, construction, retail, hospitality are recognisable. Important for FRS sector rate. Fallback question: "In one sentence, what does the business do?"

9.6 FRS sector (if applicable)

• FRS sector inference — Inference rule: infer from 9.5. Fallback question: "If you are on the Flat Rate Scheme, which HMRC sector category applies to your business?"

9.7 Exempt supplies

• Exempt supplies inference — Inference rule: presence of financial/insurance/educational/residential rental income. Fallback question: "Do you make any VAT-exempt sales (financial services, insurance, education, health, residential lettings)?" If yes and non-de-minimis, R-UK-1 fires.

9.8 Construction / CIS

• CIS inference — Inference rule: CIS references in payment descriptions, construction-related counterparties. Fallback question: "Are you registered under the Construction Industry Scheme (CIS)? Do you make or receive supplies of construction services?" If complex, R-UK-4 fires.

9.9 Prior period position

• Prior period inference — Inference rule: not inferable from a single period statement. Always ask. Question: "Do you have any underpayment or overpayment carried forward from the previous VAT period?"

9.10 Overseas customers

• Overseas customers inference — Inference rule: foreign IBANs or foreign currency on incoming, foreign-name customers. Fallback question: "Do you have customers outside the UK? Are they businesses (B2B) or consumers (B2C)?"

Section 10 — Reference material

Validation status

This skill is v2.0, rewritten in April 2026 to align with the Malta v2.0 architecture (vat-workflow-base + country skill). It supersedes v1.0 (2025, standalone monolithic skill). The UK-specific content (box mappings, rates, thresholds, blocked categories, FRS percentages) requires validation by a UK-qualified accountant (ACA/ACCA/CTA).

Sources

Primary legislation:

1. Value Added Tax Act 1994 (VATA 1994) — legislation.gov.uk
2. VAT Regulations 1995 (SI 1995/2518)
3. Finance Act 2024; Finance Act 2025
4. The Value Added Tax (Flat Rate Scheme) Order 2004
5. The VAT (Input Tax) Order 1992 (SI 1992/3222)
6. Finance Act 2017 (Limited Cost Trader provisions)
7. The Value Added Tax (Section 55A) (Specified Services and Excepted Supplies) Order 2020 (CIS reverse charge)
8. Making Tax Digital (VAT) Regulations 2018 (SI 2018/261)
9. Finance Act 2021 (new penalty regime from January 2023)

HMRC guidance: 10. HMRC VAT Notice 700: The VAT Guide 11. HMRC VAT Notice 733: Flat Rate Scheme for small businesses 12. HMRC VAT Notice 731: Cash accounting 13. HMRC VAT Notice 732: Annual accounting 14. HMRC VAT Notice 735: Bad debt relief 15. HMRC VAT Notice 48: Extra-statutory concessions (business entertainment of overseas customers) 16. HMRC VAT Notice 708: Buildings and construction 17. HMRC VAT reverse charge for construction guidance

Other: 18. HMRC exchange rates — https://www.gov.uk/government/collections/exchange-rates-for-customs-and-vat 19. HMRC FRS trade sectors and percentages — https://www.gov.uk/vat-flat-rate-scheme/how-much-you-pay 20. HMRC MTD-compatible software list — https://www.gov.uk/guidance/find-software-thats-compatible-with-making-tax-digital-for-vat

Known gaps

1. The supplier pattern library in Section 3 covers the most common UK and international counterparties but does not cover every regional supplier or SME.
2. The worked examples are drawn from a hypothetical IT consultant. They do not cover construction, retail, e-commerce, hospitality, or manufacturing specifically. A v2.1 should add sector-specific worked examples.
3. CIS reverse charge is simplified. The end-user exemption and intermediary supplier rules are highly fact-specific — R-UK-4 fires for complex cases.
4. Import VAT and postponed VAT accounting (PVA) for goods imports are not covered in detail. A future version should add import scenarios.
5. Partial exemption annual adjustment calculations are outside scope — R-UK-1 fires.
6. Red flag thresholds (GBP 5,000 single transaction, GBP 400 tax-delta, GBP 10,000 absolute position) are conservative starting values — not empirically calibrated.
7. Northern Ireland Protocol: Northern Ireland has a unique position for goods (still follows EU rules for goods). This skill treats NI as part of the UK for services but acknowledges that goods trade between NI and EU may require different treatment.

Change log

• v2.0 (April 2026): Full rewrite to align with Malta v2.0 architecture (vat-workflow-base + country skill). Quick reference moved to top (Section 1) with conservative defaults and FRS table. Supplier pattern library restructured as literal lookup tables (Section 3, 12 sub-tables). Six worked examples added (Section 4). Tier 1 rules compressed (Section 5). Tier 2 catalogue restructured to compressed format (Section 6, 13 items). Excel working paper specification added (Section 7). Bank statement reading guide added (Section 8). Onboarding moved to fallback role with inference rules (Section 9). Reference material moved to bottom (Section 10). Post-Brexit treatment unified: EU and non-EU suppliers both trigger reverse charge. Refusal catalogue added (R-UK-1 through R-UK-5). Companion skill reference added (vat-workflow-base v0.1).
• v1.0 (2025): Initial skill. Standalone monolithic document covering UK VAT Act 1994, box mappings, reverse charge mechanics, blocked categories, edge case registry, and test suite.

Self-check (v2.0 of this document)

1. Quick reference at top with box table and conservative defaults: yes (Section 1).
2. Supplier library as literal lookup tables: yes (Section 3, 12 sub-tables).
3. Worked examples drawn from hypothetical IT consultant: yes (Section 4, 6 examples).
4. Tier 1 rules compressed: yes (Section 5, 13 rules).
5. Tier 2 catalogue compressed with inference rules: yes (Section 6, 13 items).
6. Excel template specification with mandatory recalc: yes (Section 7).
7. Onboarding as fallback only, inference rules first: yes (Section 9, 10 items).
8. All 5 UK-specific refusals present: yes (Section 2, R-UK-1 through R-UK-5).
9. Reference material at bottom: yes (Section 10).
10. Entertainment block explicit (overseas customer exception noted): yes (Section 5.8 + Example 3).
11. Motor vehicle block explicit: yes (Section 5.8).
12. FRS Limited Cost Trader test explicit with 16.5% trap: yes (Section 5.10 + Example 6).
13. Post-Brexit EU treatment unified with non-EU: yes (Section 3 header note + Section 5.6).
14. Key rate traps (chocolate biscuits vs cakes, hot takeaway vs cold): yes (Section 5.3).
15. CIS reverse charge covered with refusal for complex cases: yes (Section 5.7 + R-UK-4).

End of UK VAT Return Skill v2.0

This skill is incomplete without the companion file loaded alongside it: vat-workflow-base v0.1 or later (Tier 1, workflow architecture). Do not attempt to produce a VAT100 without both files loaded.

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