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VAT Handling

SpeyBooks handles UK VAT accounting automatically, including full support for Making Tax Digital (MTD).

VAT is treated as a first-class accounting concern: calculated per line item, posted to dedicated control accounts, and reported directly from the ledger.

VAT rates​

SpeyBooks supports the standard UK VAT rates.

RatePercentageTypical use
standard20%Most goods and services
reduced5%Home energy, children's car seats
zero0%Food, books, children's clothing
exempt—Insurance, education, healthcare

VAT rates are applied explicitly. Nothing is inferred or guessed.

Applying VAT to invoices​

VAT is specified per line item when creating an invoice.

{
  "items": [
    {
      "description": "Consulting services",
      "quantity": 10,
      "unitPrice": 50000,
      "vatRate": "standard"
    },
    {
      "description": "Training materials",
      "quantity": 1,
      "unitPrice": 10000,
      "vatRate": "zero"
    }
  ]
}

SpeyBooks calculates VAT deterministically:

{
  "success": true,
  "data": {
    "subtotal": 510000,
    "vatAmount": 100000,
    "total": 610000
  }
}
Minor units

All monetary values are expressed in minor units (pence for GBP). 510000 = £5,100.00

VAT accounting model​

VAT is tracked using dedicated control accounts:

  • VAT Output (2100) — VAT charged on sales
  • VAT Input (2110) — VAT paid on purchases

Your VAT liability is calculated as:

VAT liability = VAT Output − VAT Input

These accounts are system-controlled and updated automatically.

Reverse charge VAT​

For certain transactions (commonly B2B services from EU suppliers), the reverse charge applies.

When a transaction is marked as reverse charge:

  • VAT is accounted for but not charged to the supplier
  • Both VAT Output and VAT Input entries are generated
  • The net VAT impact is zero

SpeyBooks applies the correct postings automatically.

VAT reports​

SpeyBooks generates MTD-compatible VAT returns directly from the ledger.

curl "https://api.speybooks.com/v1/reports/vat?from=2026-01-01&to=2026-03-31" \
  -H "Authorization: Bearer sk_live_your_api_key"

Response

{
  "success": true,
  "data": {
    "period": {
      "from": "2026-01-01",
      "to": "2026-03-31"
    },
    "boxes": {
      "box1": 25000,
      "box2": 0,
      "box3": 25000,
      "box4": 5000,
      "box5": 20000,
      "box6": 125000,
      "box7": 25000,
      "box8": 0,
      "box9": 0
    }
  }
}

VAT reports are derived, not stored. They reflect the exact ledger state for the requested period.

Submitting to HMRC​

SpeyBooks supports submission of VAT returns via the HMRC MTD API.

See VAT Returns for details on authorisation, submission, and confirmation.

Key principles​

  • VAT is calculated per line item
  • VAT postings are automatic and deterministic
  • Control accounts are protected
  • Reports are generated directly from the ledger
  • MTD compliance is built in, not bolted on

VAT handling in SpeyBooks is designed to be correct, inspectable, and auditable.