How to File a VAT Return: A Step-by-Step Guide

VAT-registered businesses must file VAT returns with HMRC. However, if you’re new to dealing with VAT, you might not know how to complete your return properly.

Knowing how to submit VAT returns is key if you’re a registered business, but we understand that not everyone will be fully knowledgeable on this. To learn more about how to file a VAT return, continue reading our step-by-step guide.

What is a VAT Return?

A VAT return is a type of digital form that gets sent to HMRC, showing how much VAT tax you owe them. VAT returns show your total sales and purchases across a specific period (usually three months).

It also shows how much VAT you owe for completed sales and how much you’re able to reclaim for any purchases that your business has made.

The main purpose of a VAT return is to simply inform HMRC how much tax you need to pay. If you’re not a VAT-registered business, you do not have to pay VAT or submit VAT returns.

VAT Return Deadline

If you are a VAT-registered business, it’s important to ensure your VAT returns are filed on time. The deadline for submitting VAT returns is typically one calendar month and seven days after your accounting period comes to an end. This is also when payments to HMRC are due.

By logging into your VAT online account using your Government Gateway ID, you can:

• See when you need to file a VAT return
• Find out when your payment to HMRC must clear in their account
• Check for any issued penalties and appeal against them

Why is Filing a VAT Return on Time Important?

Filing your VAT return on time is important. If you don’t file your VAT return on time, HMRC will likely send you a VAT notice of assessment of tax, which details how much tax you owe them.

In some cases, you’ll be issued a penalty for not submitting your return on time or sending a late payment. Depending on which accounting period it’s for, how much VAT you owe to HMRC will vary.

If, for any reason, you’re unable to pay HMRC by the deadline, you should get in touch with them as soon as possible to avoid any issues. Viewing your online account will show the deadline for your VAT return.

You can pay HMRC easily online using your VAT registration number. The process of paying HMRC is simple:

1. Use a debit or credit card card to make your payment (unless you’ve set up a direct debit)
2. Wait to receive a payment reference number from HMRC (which you usually get right away)
3. Check your payment has appeared in your online VAT account within three to five days

Making Tax Digital (MTD)

As of April 2022, Making Tax Digital for VAT became mandatory in the UK. This means that all businesses that are VAT-registered must use MTD-approved software when they file their VAT return online.

Unfortunately, paper returns are no longer accepted, unless you’re exempt. It’s still possible to submit your VAT return on paper if you’re eligible to be exempt for reasons such as:

• Your religion prohibits you from using computers
• You’re unable to use a computer due to age, disability, or having little access to the internet

Filing a VAT Return

So, how do you file VAT returns? Filing your VAT return doesn’t have to be difficult. We understand it can seem daunting to file your return, especially for the first time. Many people are conscious of making mistakes or skipping key information.

Typically, VAT-registered businesses have an accountant who deals with their VAT returns on their behalf, although this isn’t always the case. However, an accountant leaves little room for error while handling your accounts.

VAT returns can be completed following a few simple steps – from gathering any financial information to simply logging in to your online account on the HMRC website and beginning the process. From start to finish, the process typically looks like this:

1. Gather key information for the VAT period (such as sales and purchases)
2. Calculate your VAT figures (including your output VAT and input VAT)
3. Assess your figures to see if you owe HMRC money or are due a refund
4. Using MTD-compliant software, submit your VAT return
5. If required, pay any owed VAT by the deadline

HMRC has more information available for when you submit your VAT return. The process is relatively straightforward and can be made easier when you have all your key information to hand.

Once you’ve submitted your VAT return and made any payments to HMRC, you should ensure that you keep your calculations recorded in case any issues arise.

Expert Tax Advice and Guidance at DH Business Support

At DH Business Support, you can expect professional and trustworthy accounting and payroll services. Our expert team of dedicated accountants puts clients first and always ensures the best services. We can offer you tax advice when you need it most.

Having built up a great deal of knowledge in several areas of tax, we can help you handle your taxes while offering support and advice at all times. We understand how difficult it can be to manage your taxes, including VAT.

Our job is to simplify the tax process for you and minimise the amount of tax you need to pay. When our clients seek guidance, they’ll be provided with all the information they require, both clearly and simply.

We eliminate the confusion that often comes with all those numbers that you need to keep track of by using a streamlined technology.

If you’d like to find out more about what we do and how we can help, please don’t hesitate to get in touch with us today. We look forward to hearing from you!