XBert Type: Standard
Accounting Software: Xero, MYOB, QuickBooks
Country Restriction: the United Kingdom only
Risk Type: Tax Risk
Business Function: Purchases
Overview
This XBert checks for bills that include VAT raised against a supplier who was not registered for VAT on the date of the bill. If you reclaim VAT that the supplier was not entitled to charge, HMRC can disallow the claim, so catching this early protects you from a future repayment and penalties.
What it does
XBert scans your bills (accounts payable) and compares each supplier against the official Companies House record matched to that supplier's tax (VAT) number. It looks at the VAT charged on the bill and at whether the supplier held a valid VAT registration at the time the bill was dated.
How it works
XBert raises this XBert only when all of the following are true:
The bill is in a Draft, Submitted or Authorised status. Voided and deleted bills are ignored.
VAT was actually charged on the bill. If no VAT was added, the bill is ignored.
The supplier is an exact match to a Companies House record by their tax (VAT) number. Loose or name-only matches are ignored to avoid false alarms.
The supplier was not registered for VAT on the date the bill was raised.
Importantly, XBert checks the supplier's VAT registration as it stood on the bill date, not just today. If the supplier was properly VAT registered when the bill was raised, this XBert will not fire even if they later cancelled their registration. If XBert cannot confirm the supplier's VAT status, it stays quiet rather than raise a false alarm. Where a supplier has more than one affected bill, XBert groups them into a single XBert and totals the VAT involved.
Example/Use Case
Priya runs the bookkeeping for a small marketing agency. A long-standing contractor, Marsh Studio Ltd, cancelled its VAT registration in March but kept sending invoices with 20% VAT added. In May, Priya entered a bill for £1,800 plus £360 VAT. Because Marsh Studio Ltd was not VAT registered on the bill date, Priya should not reclaim that £360. XBert flags the bill before the VAT Return is filed. Priya asks Marsh Studio for a corrected invoice with no VAT, removes the VAT from the bill in her accounting software, and avoids HMRC clawing back the credit later.
Accounting software
XBert integrates with:
Which countries it supports
The United Kingdom only.
Processes
This XBert falls under the Purchases (AP) category.
To action:
Confirm the supplier's contact details are correct, including their company name and VAT number.
Check whether the supplier was VAT registered on the date of the bill using the UK VAT number checker.
If the supplier was not registered, request a corrected invoice exclusive of VAT.
Update the bill and the supplier's tax rate in your accounting software so no VAT is recorded.
Make sure the VAT on these bills is not reclaimed on your VAT Return.
Once corrected, mark the XBert as resolved.
By taking these steps you keep your VAT records accurate and avoid a repayment or penalty from HMRC.