XBert Type: Standard
Accounting Software: Xero, QuickBooks Online
Country Restriction: United Kingdom only
Risk Type: Tax Risk
Business Function: Purchases
Overview
When a supplier invoice is attached to a bill, XBert reads the VAT figure printed on the document and checks that it was actually keyed onto the bill. This XBert catches the quiet opposite of an over-claim: a bill posted with no VAT at all — the whole amount went to the expense line under a zero, exempt or no-VAT code — while the attached invoice plainly charges VAT at the standard rate. That input tax never reaches box 4 of the VAT return, so the business simply pays HMRC more than it owes. Unless there is a specific reason the VAT is not recoverable, it is a keying slip with a real cash cost.
What it does
XBert reads the VAT amount and total printed on the supplier invoice attached to a bill and compares them with what was keyed. It raises a flag when the bill was keyed with no VAT but the attached document charges VAT on the same transaction. Each alert shows the unclaimed VAT in pounds, the document and bill totals that tie the two together, and the bill date, so the correction can be made before the VAT return is filed.
How it works
A flag is raised only when all of the following hold:
the bill was keyed with no VAT — the line went to a zero, exempt or no-VAT code;
the attached supplier invoice shows a VAT amount, and the document’s totals agree with the bill — so it is the same transaction, not a statement or an unrelated file;
the VAT on the document works out at the standard rate on the invoice amount — so the printed figure can be trusted rather than being OCR noise; and
the amount is material.
Receipts, statements and pro-forma documents are ignored, and bills coded to the CIS domestic reverse charge are left out — there the VAT is self-accounted, not claimed. Some VAT is genuinely irrecoverable — blocked items such as business entertainment, or a supplier who is not VAT registered — so a flagged bill is a prompt to check, not an instruction to reclaim.
Example/Use Case
Priya keys a batch of supplier bills for Harbour Joinery Ltd. A trade invoice from Meridian Tools for £120.00 lands with the supplier’s default tax code set to No VAT, so the whole £120.00 is posted to materials and nothing goes to VAT. The attached invoice plainly shows £100.00 net and £20.00 VAT. Nobody notices, the quarter is filed, and Harbour Joinery pays HMRC £20.00 more than it owed. Multiply that across a year of trade purchases from a supplier whose default code was set wrongly and the firm has been leaving real money on the table every quarter. A quick check of the bill against its attachment at keying time would have caught it before the return went out.
Accounting software
This XBert runs on bills with attached supplier documents from Xero and QuickBooks Online.
Which countries it supports
This XBert applies to the United Kingdom only. It uses VAT terminology and HMRC rules specific to the UK. (The related Australian check, Tax on Attachment Not Claimed, covers GST.)
Processes
Business area: Purchases (accounts payable). To resolve a flagged bill:
Select Resolve Now to open the bill in your accounting software.
Compare the bill with the attached supplier invoice.
If the VAT should have been claimed, edit the bill so the net and VAT match the document — usually by changing the line’s tax code to the standard rate — and re-approve it.
If the VAT is genuinely not recoverable — for example a blocked item or a supplier who is not VAT registered — leave the bill as it is and file this XBert.
Where the same supplier keeps appearing, fix the supplier’s default tax code so the next bill is keyed right first time.
If the VAT return has already been filed, recover the VAT as a correction on a later return and note it in the working papers.