UK signals move toward digital VAT reporting aligned with ViDA and SAF-T
HMRC's June 2026 Tax Update hints at supplementary transaction-level data for VAT returns, mirroring ViDA Pillar 1 and SAF-T frameworks across the EU. No mandate yet, but multinationals should design ViDA-aligned data architectures now.
On 23 June 2026, HMRC published a Tax Update containing 40 measures, including exploration of richer transaction-level data to supplement the 9-box VAT return. The move signals alignment with ViDA digital reporting and SAF-T frameworks already in use across the EU, and hints at future UK adoption of standardised digital reporting.
HMRC is exploring how to use transaction-level data already held in business ERP and accounting systems to supplement the existing 9-box VAT return. The announcement came as part of the Tax Update 2026: Simplification, Modernisation and Fairness, published on 23 June 2026, which contains 40 measures affecting VAT, e-invoicing, customs and indirect tax compliance.
The current VAT return provides little useful insight for compliance, risk-targeting or repayment validation. HMRC sees richer data as a way to improve both business efficiency and tax authority oversight.
Alignment with EU and international frameworks
The direction mirrors existing digital reporting regimes:
- ViDA Pillar 1 (Digital Reporting Requirements) across the EU
- SAF-T frameworks in Portugal, Romania, Poland, Norway, France (draft) and Hungary
- Pre-filled returns already in use in Italy, Spain, Hungary and Portugal
This pattern strongly suggests the UK will move toward standardised digital reporting in the future, potentially leveraging the Peppol e-invoicing network, which HMRC confirmed in the same Tax Update.
What multinationals should do now
No formal mandate has been announced. However, the signal is clear: businesses should design ViDA-aligned data architectures now. This avoids the cost and complexity of building fragmented “UK-only” systems later, only to rebuild them when a UK SAF-T-like or near-real-time reporting regime arrives.
For multinationals already operating under ViDA in the EU, this is the most strategically important VAT signal in the package. The UK is signalling its intention to converge with the EU’s digital reporting model, not diverge from it.