VAT Audit Report

The VAT Audit Report is part of the VAT Return or Flat Rate VAT Return. It shows the transactions that make up the VAT charged or paid by your organisation – invoices, bills, expense claims, credit notes, bank transactions, and manual journals. Your user role determines whether you can view and create reports.

Open the VAT Audit Report

  1. Generate the VAT Return or Flat Rate VAT Return.
  2. Click the VAT Audit Report tab.

    Image showing audit report tab.

  3. (Optional) Click Wide view at the top of the report to display all columns. You can scroll across to view them.

    Image showing wide view link.

  4. (Optional) Click a Reference or Account column link to view the transaction details.

    Manual journals - The Show journal on cash basis reports check box must be selected for the journal to show on cash basis reports.

  5. (Optional) Click the arrow on any link to add a footnote.

    Once added, the link shows a footnote number. Click it to go to the footnote at the bottom of the report.

Depending on the report status and your role you can publish, export, save or archive the VAT Return.

Xero saves and exports the VAT Audit Report with the VAT Return. Xero doesn't include the VAT Audit Report when you submit your VAT Return or Flat Rate VAT Return to HMRC.

When you publish your return, you can choose to delete the VAT Audit Report from the published report. If you do this, you can't reinstate it later. You'll need to delete the published report, rerun the return and republish it including the VAT Audit Report. You may end up with differences if there have been changes in the period since the original publishing date.

How Xero compiles the VAT Audit Report

Xero follows these rules when compiling the report:

  • Transactions are included on the cash or accruals basis, according to your selected VAT scheme.
  • Xero groups transactions according to their tax rate.

    Image showing list of transactions.

  • Transactions that are 'No Tax' or transactions that have line items set to 'No VAT' will still be listed on the VAT Audit report in the 'No VAT' section. This is a useful reference when checking that all the transactions you expect to be included in your VAT Return have been correctly accounted for.
  • Late claims (if any) show under a special section for the applicable tax rate. For example, '20% (VAT on Income) Late Claims' will appear separately from '20% (VAT on Income)' transactions in the same reporting period.

    Image showing late claims on VAT Audit Report.

  • If you adjust the VAT on a transaction, each adjusted VAT amount appears in a separate separate Adjusted section for the rate.

    Tax showing on Audit Report with 'Adjusted' in tax rate name.