UK VAT Return
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HMRC Checks Integration To Bolster the Accuracy of Tax Systems’ Cloud-Based VAT Platform

Tax Systems, a UK and Ireland provider of tax software, has implemented HMRC-recommended checks into its cloud-based AlphaVAT digital tax platform.

The integration of these checks will enable AlphaVAT users to make correct decisions for VAT handling and improve the accuracy of submissions and payments.

Tax Systems are the first software vendor to bring this functionality to its VAT customers, following a successful trial in conjunction with HMRC, and has become the first vendor in the VAT regime to successfully conclude a ‘digital checks’ trial with HMRC.

Typically, VAT checks are run after VAT has been submitted, and this is when errors or discrepancies can result in a resubmission of a return. As a result, organisations can find their VAT obligation becoming subject to change, requiring them to operate a legacy process that adds to the time required to finalise a return.

So far, HMRC has collaborated with various third-party software vendors to enhance digital checks within tax processes. Such digital checks are to prove paramount to the government’s plans to uphaul tax administration to make it more accurate and efficient.

By integrating in-product prompts to the AlphaVAT platform, key elements of the VAT return process will now become automated, ultimately reducing re-work when HMRC runs its checks.

Customers can then rely on the accurate calculation of their VAT amounts, avoiding fines and protecting their reputation. Digital checks will also reduce errors and the potential tax gap, and as a result, improve financial planning.

The Tax Systems pilot scheme was conducted in cooperation with HMRC and resulted in a customer engagement rate of 79 per cent, revealing the current demand for digital checks functionality. The trial also showed that customers in the trial group created 86 per cent more custom data checks than those in the control group, demonstrating that the introduction of specific HMRC checks would increase data quality on a wider basis.

Nicole Newbury, HMRC’s director for wealthy and mid-sized business compliance, explains the purpose of collaborating on this trial: “We want taxpayers and businesses to get their tax affairs right, from the outset. Working with Tax Systems on the VAT digital prompt trial has helped provide the evidence needed to build correctness into tax and business reporting software, as a default, and prevent non-compliant outcomes from happening in the first place.

“In the last six years, we have trialled and deployed over 50 nudges and prompts across multiple tax regimes in our own filing software – benefits include over £800million additional tax paid at the right time, improved customer experience and reduced customer and HMRC costs for error correction and investigation.

“HMRC’s engagement with Tax System’s software in relation to this trial should not be seen as an endorsement of their product or services.”

AlphaVAT is a purpose-built VAT compliance solution capable of handling complex VAT calculations with audit trails and diagnostics. When harnessed to a tax computation engine, these provide an MTD-compliant pathway to Corporation Tax.

Russell Gammon, chief solutions officer at Tax Systems
Russell Gammon

“We’ve been working closely with HMRC in recent months to design and implement our digital checks process, and feedback to the pilot programme has been extremely positive,” comments Russell Gammon, chief solutions officer at Tax Systems.

“We’re delighted to have had the opportunity to work alongside HMRC on this pilot and be the first vendor to bring these capabilities to our VAT users, particularly within our widely-used cloud-based solution.”


  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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