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GNUCash and Compliance with UK Authorities

In the UK the body responsible for tax collection is HM Revenue and Customs

This body imposes very specific requirements on businesses in respect of record keeping see

They do not, however, make any recommendations to businesses about whether the records should be paper based in ledgers or software based, and if software based which software packages.

Electronic and paper VAT records

"As long as your VAT records meet HMRC's requirements, you can keep them in whatever format - paper and/or electronic - that you prefer. If you do keep all or part of your records on a computer or with a computer bureau, you must make sure that your records are easily accessible to you and to a VAT officer when they visit.

If you upgrade to a new computer system which is not compatible with your old system, you must make sure that the records held on your old system remain accessible for up to six years. If this is not possible, then you must make paper copies.

You can also keep your records on microfilm or microfiche, as long as you have received approval from HMRC and it is easy for VAT officers to view those records when they need to.

We do not recommend any particular software package for your VAT records, but we have worked with British Standards to produce a VAT accounting software standard - known as Publicly Available Specification Accounting software standard - PAS 76."

PAS 76

From the British Standards Institution (BSI) website

"This is why BSI was asked to help develop a specification for accounting software that could be assessed and Kitemark certified in order to harmonize Value Added Tax (VAT) reporting in the UK. BSI worked with HMRC to create a Publicly Available Specification (PAS) Accounting software. Value added tax in the UK. Specification, which aims to:

  • form the basis of an accounting systems that facilitates the production and retention of VAT accounting records and declarations
  • provide warning of potential VAT errors by applying controls to data input and processing
  • offer the ability to self-audit records for VAT purposes by way of reports that apply tests to the retained data to assist in the identification of potential errors, transactions inconsistent with expected or known business activities, and transactions that make up any declared totals
  • offer the ability to make accounting data available to HM Revenue & Customs auditors or other third parties
  • offer the ability to provide the information needed to evidence the accuracy and completeness of any VAT-related declaration.

In short, PAS 76 specifies requirements for accounting software which records, creates and stores transactions relevant to outputs, output tax, inputs and input tax, and which supports the reporting of them for declaration on a Value Added Tax (VAT) return. It covers VAT processing for:

  • input controls
  • data recording and reporting
  • provision of user self-audit and related reports
  • provision of functionalist for downloading VAT audit data
  • user documentation relating to specific VAT issues.

PAS 76 does not cover Intrastat report, Margin Schemes, Retails Schemes, and the Capital Goods Scheme.

Note: It is assumed in standardization that users of standards will comply with the law. This PAS does not therefore make it a requirement that users comply with particular legislation; however, relevant legislation has been drawn attention to."

GNUCash and PAS 76

It is not clear if GNUCash is PAS 76 compliant. If it is then GNUCash should carry the appropriate kitemark.