How do I file VAT returns?

If you’re business is VAT registered or considering becoming VAT registered, then you may want to know how to file your own VAT returns. Many business owners decide to outsource this job to an accountant for peace of mind and to save time. But in this blog, we cover the basic things you need to know to file a VAT return.

Can you do your own VAT return?

The answer to this question is yes, you can file your own VAT return. If your business is simple, then you should be able to do your VAT return yourself. However, there can be many complexities to VAT such as input VAT not always being claimable, different VAT rates for various products and different VAT schemes. Also you’ll need to remember to submit your VAT returns on time every quarter.

In order to file your VAT return online, youll need Making tax digital (MTD) compatible software, so bear this in mind if you currently do manual accounts for your business.

Because of this, many business owners get an accountant to file their VAT returns for them. It’s good to use an accountant with a specialist VAT team such as dns accountants to help you.

Do I need to submit a VAT return?

Any business that is VAT registered needs to submit quarterly VAT returns. A business must be registered for VAT if its taxable turnover is over £90,000. However, businesses under that turnover can register voluntarily.

How do I submit a VAT return?

Under the government’s scheme ‘Making Tax Digital’ all businesses over the VAT threshold of £90,000 taxable turnover must submit VAT returns online. From 1 April 2022, ALL VAT registered businesses will be expected to submit VAT returns online (including those that voluntarily register for VAT but are under the threshold.

When do I need to submit a VAT return?

VAT returns need to be submitted quarterly (every 3 months) – this period of time is known as your ‘accounting period’.

The deadline for submitting the return online and paying HMRC are usually the same - 1 calendar month and 7 days after the end of an accounting period.

What Happens If You Miss the Deadline?

Missing the deadline to submit a VAT return can result in penalties under HMRC’s new points-based system introduced in 2023.

For each late submission, you’ll receive a penalty point. Once you reach the threshold (e.g., four points for quarterly filers), a £200 fine will apply.

To avoid this, always know your deadlines:

• Quarterly filers: Submit within one month and seven days after the end of the quarter.
• Monthly filers: Submit by the same deadline each month.
• Annual filers: Submit within two months after your accounting year ends.

Using tools like reminders in MTD-compliant software can help ensure you never miss a deadline when you need to file VAT return online.

What do I need to submit my VAT return online?

You will need:

• Making tax digital (MTC) compatible software.
• VAT number.
• VAT online account.

What information is on a VAT return?

The information you submit on a VAT return is as follows:

• Your total sales and purchases.
• The amount of VAT you owe.
• The amount of VAT you can reclaim.
• What your VAT refund from HMRC is.

How Does Postponed Import VAT Accounting Work?

Postponed Import VAT Accounting (PIVA) allows businesses importing goods into the UK to defer paying import VAT at the border. Instead of paying immediately, you account for it on your next VAT return using Boxes 1, 4, and 7.

Here’s how it works:

• Record the import VAT due in Box 1 (output tax).
• Reclaim it as an input tax in Box 4 if eligible.
• Include the total value of imported goods in Box 7.

PIVA simplifies cash flow management and reduces immediate financial strain on businesses. If you’re an importer, ensure that your records align with HMRC guidelines and use MTD-compliant software to accurately report through VAT returns online.

Common Mistakes to Avoid When Filing VAT Returns

Filing a VAT return can be straightforward if done correctly, but there are common pitfalls to watch out for:

• Incorrect calculations or miscalculated input/output tax.
• Missing deadlines for VAT return submission.
• Using non-compliant software.
• Incomplete records of transactions.
• Penalties increase with points, £200 fine at threshold.

Do I submit a VAT return if I have no VAT to pay or reclaim?

Yes, you do, this is known as a nil return or zero return. You can read more about this in our blog ‘When and how to submit a zero VAT return’

Can I amend a VAT return once submitted?

Net errors made on previous VAT returns can be corrected on subsequent VAT returns if:

• They are £10,000 or less or.
• £10,000 to £50,000 (but not exceeding 1% of quarterly turnover) and.
• They are not deliberate.
• Relate to an accounting period that ended less than four years ago.

If the errors don’t meet the above conditions, then you will need to notify HMRC VAT error correction team.

How to Get a VAT Refund

If your input tax (VAT on purchases) exceeds your output tax (VAT on sales), you may be entitled to a refund from HM Revenue & Customs VAT return submissions.

To claim this, ensure that Box 5 of your VAT return accurately reflects the amount owed to you. HMRC typically processes refunds within 10 working days of receiving your filed VAT return.

Refunds can also be claimed in specific scenarios, such as when you’ve written off bad debts or exported goods outside the UK. To avoid delays, ensure that your records are complete and comply with HMRC’s requirements.

Using VAT returns online systems or Making Tax Digital (MTD)-compliant software can streamline this process and minimise errors.

Need help filing a VAT return?

If you need help filing your VAT returns or advice on VAT registration or paying VAT then contact dns accountants today. We offer a wide range of VAT support services and have a specialist VAT team to help with all your VAT registration and filing needs and answer any of your VAT questions.

If you would like to speak with one of our VAT experts and need help to file VAT returns, please contact dns today, or book a call.

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