CUNNTAS
VAT & Making Tax Digital
VAT should not be an isolated calculation performed after the bookkeeping is complete.
In CUNNTAS, VAT is designed to form part of the underlying accounting transaction from the moment income, expenditure or another VAT-relevant event is recorded. The resulting VAT information can then contribute to the Organisation's VAT records, VAT Return and applicable Making Tax Digital (MTD) obligations.
VAT functionality is included within the standard £30 per Organisation per month, plus VAT CUNNTAS subscription.
CUNNTAS is also designed for Organisations with more complex structures, including businesses operating through VAT groups, while preserving the individual accounting records of each member Organisation.
1. VAT Integrated with the Accounts
CUNNTAS integrates VAT with the Organisation's double-entry accounting records.
When a transaction has a VAT consequence, the appropriate VAT treatment forms part of that transaction.
This allows the General Ledger, Sales and Purchase records, VAT accounts and VAT reporting to derive from the same underlying financial information.
The objective is to avoid maintaining one version of a transaction for bookkeeping and another unrelated version solely for VAT.
2. UK VAT
CUNNTAS is being developed specifically around UK financial administration.
The VAT functionality is therefore designed for Organisations subject to the UK VAT system and the requirements applicable to VAT-registered businesses.
An Organisation can maintain the information relevant to its VAT registration and accounting arrangements within CUNNTAS.
3. Controlled VAT Rates
VAT rates are controlled centrally within CUNNTAS rather than requiring every Organisation to create its own versions of statutory VAT rates.
The platform can maintain applicable treatments including:
- Standard Rate
- Reduced Rate
- Zero Rate
- Exempt
- Outside the Scope / No VAT
Where statutory VAT rates change, CUNNTAS can maintain effective dates so that a new rate does not alter the VAT treatment of historical transactions that occurred under an earlier rate.
4. VAT Treatment Is More Than a Percentage
Not every transaction with a zero VAT amount has the same VAT treatment.
A zero-rated transaction, an exempt transaction and a transaction outside the scope of VAT may all result in no VAT being charged, but they are not necessarily equivalent for VAT accounting and reporting purposes.
CUNNTAS therefore distinguishes the VAT treatment of a transaction rather than treating VAT merely as a percentage calculation.
5. Sales and Output VAT
Where an Organisation makes a taxable sale, the relevant VAT treatment can be applied to the Sales Invoice or other appropriate sales transaction.
The accounting record can distinguish between the Organisation's income and the VAT collected on behalf of HMRC.
For example, a £100 net sale subject to 20% VAT produces:
Net Sale: £100.00
VAT: £20.00
Gross Amount: £120.00
The £20 VAT is not additional sales income. It forms part of the Organisation's VAT accounting.
6. Purchases and Input VAT
Purchase transactions can similarly record the appropriate VAT treatment.
Where input VAT is properly recoverable, CUNNTAS can distinguish the underlying expense or asset value from the VAT element.
Whether VAT is recoverable depends upon the transaction and the Organisation's circumstances. CUNNTAS therefore provides the accounting mechanism but does not assume that every VAT amount appearing on a purchase is automatically recoverable.
7. Sales Invoices and Credit Notes
VAT information forms part of the permanent financial documents created through CUNNTAS.
Sales Invoices can show the relevant net, VAT and gross amounts.
Where an Invoice requires an appropriate subsequent adjustment, a Credit Note can preserve the relationship between the original financial document and the correction.
This supports both accounting integrity and VAT auditability.
8. Purchase Invoices and Credit Notes
The same principles apply to Supplier transactions.
Purchase Invoices and Credit Notes can carry the VAT treatment applicable to the underlying purchase.
The resulting amounts contribute to the Organisation's Supplier records, General Ledger and VAT information from the same transaction.
9. VAT Periods
A VAT-registered Organisation operates according to the VAT periods applicable to its registration.
CUNNTAS can maintain the Organisation's VAT periods and associate relevant transactions with the appropriate VAT reporting process.
For a typical quarterly arrangement, this may involve VAT periods ending at regular three-month intervals, but CUNNTAS should use the actual VAT arrangements applying to the Organisation rather than assuming every business follows the same quarters.
10. Making Tax Digital
CUNNTAS is designed around the requirements of Making Tax Digital for VAT.
MTD requires applicable VAT-registered businesses to maintain appropriate digital records and submit VAT information using compatible software.
CUNNTAS is being developed so that the accounting records maintained within the platform can support the digital VAT process rather than requiring figures to be manually copied from CUNNTAS into an unrelated VAT filing system.
11. Digital Records
The principle of MTD is not simply that a VAT Return is transmitted over the internet.
The underlying VAT records must also be maintained appropriately in digital form.
CUNNTAS records transactions within the Organisation's accounting system and preserves the VAT treatment associated with those records.
This allows the VAT Return to arise from the digital accounting information rather than from a separate spreadsheet assembled only when the return becomes due.
12. Digital Links
Where information moves between different parts of a digital accounting process, applicable MTD requirements concerning digital links must be respected.
CUNNTAS is designed as an integrated platform so that information generated within Sales, Purchases, Banking, the General Ledger and VAT functions can remain within a connected digital accounting environment.
This reduces unnecessary manual transfer of VAT figures between separate systems.
13. Preparing a VAT Return
CUNNTAS can use the VAT information associated with the relevant transactions to prepare the figures required for the applicable VAT Return.
The User should be able to review the VAT period, underlying transactions and resulting return information before submission.
Preparation of a return and successful submission of a return are distinct events.
CUNNTAS should not represent a VAT Return as filed merely because the figures have been calculated.
14. Review Before Filing
Automated accounting does not remove the Organisation's responsibility to review its records.
Before a VAT Return is submitted, the Organisation should ensure that transactions have been recorded appropriately, relevant banking and accounting records have been reconciled where required, and known corrections or adjustments have been dealt with.
CUNNTAS provides the underlying information and workflow required to support that review.
15. HMRC Connection
MTD filing requires an authorised connection with HMRC.
CUNNTAS is being developed to use the appropriate HMRC interfaces and authorisation processes for supported tax functions.
The Organisation must complete the applicable authorisation process before CUNNTAS can perform functions requiring access to its HMRC information.
HMRC authentication remains separate from the User's ordinary CUNNTAS login.
16. VAT Submission
Once the VAT information has been reviewed and the necessary HMRC authorisation is in place, CUNNTAS is designed to submit supported VAT Returns through the appropriate digital interface.
The platform should record the result returned by the relevant service so that a successful filing can be distinguished from a failed or incomplete attempt.
A submission should only be treated as successful when the appropriate confirmation has been received.
17. VAT Obligations
Where supported by the relevant HMRC service, CUNNTAS can use available obligation information to help identify VAT periods requiring attention.
This can assist the Organisation in understanding which returns are due and the periods to which they relate.
The Organisation remains responsible for meeting its statutory filing and payment obligations.
18. VAT Liabilities and Payments
Submitting a VAT Return and paying the resulting VAT liability are separate financial events.
Where a return establishes an amount payable to HMRC, the liability forms part of the Organisation's accounting records.
A subsequent bank payment can then be reconciled against the appropriate VAT liability.
Similarly, where the VAT position results in an amount recoverable, the accounting records can reflect the resulting balance appropriately.
19. Banking and VAT
A bank transaction does not by itself always establish the correct VAT treatment.
A payment of £120 might represent a £100 taxable purchase plus £20 VAT, but it could equally represent a transaction with a different VAT treatment.
CUNNTAS therefore connects banking information to the underlying accounting transaction rather than attempting to determine VAT merely from the amount moving through the bank account.
20. VAT Corrections and Adjustments
VAT records sometimes require correction or adjustment.
CUNNTAS is designed so that supported adjustments can be recorded transparently rather than silently rewriting historical transactions.
Where an Invoice or Credit Note is involved, the permanent financial documents help preserve the relationship between the original transaction and the subsequent correction.
This contributes to an auditable VAT history.
21. Historical VAT Information
VAT information forms part of an Organisation's financial and tax records and may need to be retained after a particular VAT period has been filed.
CUNNTAS therefore preserves historical VAT information in accordance with the platform's accounting and record-retention principles.
Filing a new VAT Return does not simply replace the records underlying previous periods.
22. VAT Groups
CUNNTAS is designed to support Organisations that operate as part of a VAT group.
A VAT group can contain several legal entities while operating under the VAT registration arrangements applicable to the group.
This creates an important accounting requirement: the individual Organisations still require their own books and financial records even though relevant VAT information must be considered at group level.
CUNNTAS is designed around that distinction.
23. Individual Records Within a VAT Group
Each member Organisation remains a separate CUNNTAS Organisation with its own:
- General Ledger
- Bank Accounts
- Sales and Purchases
- Payroll
- Financial Reports
- Accounting periods
- Underlying VAT transactions
Group membership does not merge the accounting records of the member Organisations into one set of books.
This preserves the separate financial identity of each legal entity.
24. Representative Member
A VAT group has a representative member for VAT purposes.
CUNNTAS can record the group structure and identify the Organisation acting as the representative member.
This allows the platform to distinguish between the individual Organisation whose transaction generated VAT information and the group-level process through which the relevant VAT Return is administered.
25. Group VAT Return
Where Organisations belong to the same VAT group, CUNNTAS is designed to gather the relevant VAT information from the member Organisations for the group-level VAT process.
The resulting VAT Return can therefore be prepared using information derived from the underlying member records without requiring those Organisations to abandon their individual accounting systems.
This is one of the advantages of CUNNTAS's multi-Organisation architecture.
26. Group-Level and Organisation-Level Information
CUNNTAS can preserve both perspectives.
An individual Organisation can review the VAT information arising from its own accounting records.
The authorised group-level process can then consider the information required from the participating Organisations for the VAT group.
This provides transparency over how the group position arises rather than presenting only a single unexplained total.
27. Users Managing VAT Groups
A User authorised across several related Organisations can access those Organisations through the same CUNNTAS User Account.
Appropriate permissions can then allow that User to administer the group-level VAT process without requiring separate login identities for every company.
The underlying Organisation records nevertheless remain separate and access remains subject to the User's authority for each Organisation.
28. Corporation Tax Is Separate
VAT group arrangements should not be confused with Corporation Tax group arrangements.
The fact that companies belong to a VAT group does not mean they cease to have their individual Corporation Tax responsibilities.
CUNNTAS therefore maintains VAT group relationships separately from the structures and information required for Corporation Tax and supported group tax functions.
This distinction is important for accurate statutory administration.
29. VAT and Imported Accounting Information
An Organisation moving to CUNNTAS may already have VAT transactions and previously filed VAT periods.
CUNNTAS is being designed to support the import and mapping of appropriate accounting information from existing systems.
Historical VAT information must be treated carefully so that imported records do not incorrectly create new VAT obligations or duplicate amounts that have already been included in filed returns.
30. VAT and Accounting Frameworks
VAT is a tax function, while the Organisation's financial statements operate within an appropriate Accounting Framework.
CUNNTAS keeps these concepts connected but distinct.
The VAT treatment of a transaction contributes to the tax records, while the underlying income, expenditure, asset or liability contributes to the financial accounts according to the appropriate accounting treatment.
31. Security
VAT records contain financial and potentially commercially sensitive information.
Access is therefore protected by the same CUNNTAS security architecture used throughout the platform, including mandatory Two-Factor Authentication, controlled User and Organisation permissions, secure sessions and auditability.
HMRC authorisation required for tax services is additional to ordinary CUNNTAS authentication.
32. Auditability
Important VAT activity should be capable of explanation.
CUNNTAS maintains transaction records and audit information so that the relationship between the underlying accounting transactions, VAT calculations, adjustments and filing activity can be reviewed.
This is particularly important where several Users participate in the Organisation's bookkeeping or tax administration.
33. Help and Warnings
VAT terminology and treatment can be difficult, particularly for Users who do not work with VAT every day.
CUNNTAS provides contextual Help (?) information to explain functions and terminology within the VAT workflow.
Separate Warning (!) information can identify matters requiring particular attention before an action is completed.
The purpose is to help Users make informed decisions without pretending that every VAT situation can be resolved merely by selecting a percentage.
34. Responsibility for VAT
CUNNTAS provides the accounting records, calculations, digital processes and supported filing facilities required to assist an Organisation with VAT administration.
The Organisation remains responsible for the accuracy and completeness of the information it provides and for meeting its legal VAT obligations.
Where a transaction requires specialist tax judgement, the availability of software functionality does not replace appropriate professional advice.
35. VAT Is Part of the Platform
VAT and Making Tax Digital functionality form part of the standard CUNNTAS service.
There is no separate CUNNTAS VAT or MTD subscription required to obtain the core functionality included with the platform.
VAT therefore sits alongside bookkeeping, accounting, banking, Sales, Purchases, payroll, Corporation Tax, reporting and security within the same integrated financial environment.
36. Included in the CUNNTAS Subscription
CUNNTAS VAT and Making Tax Digital functionality is included within the standard £30 per Organisation per month, plus VAT subscription.
For VAT groups, each member Organisation using CUNNTAS retains its own Organisation subscription because each continues to maintain its own accounting records and financial workspace.
The group architecture then allows supported group-level VAT administration to operate across those Organisations without requiring a separate CUNNTAS VAT-group software product.
Digital records. Integrated VAT accounting. Making Tax Digital. VAT groups. One CUNNTAS platform.
The name CUNNTAS is pronounced “KOON-tas”. It comes from the Scottish Gaelic word cunntas, meaning “account”, “accounts”, “accounting” or “reckoning” — a name that reflects both the purpose of the platform and its Scottish identity.
Last Updated: 10 August 2026