- \n
- What is a VAT return?<\/a><\/li>\n\n\n\n
- Making Tax Digital for VAT (how to record, file and pay VAT)<\/a><\/li>\n\n\n\n
- Best software for Making Tax Digital<\/a><\/li>\n\n\n\n
- How to file a VAT return<\/a><\/li>\n\n\n\n
- How to submit a VAT tax return<\/a><\/li>\n\n\n\n
- How to pay VAT online<\/a><\/li>\n<\/ul>\n<\/div>\n\n\n\n
\n- \n
- VAT return deadline<\/a><\/li>\n\n\n\n
- What happens if you miss the VAT return deadline? <\/a><\/li>\n\n\n\n
- How to fill in your VAT return<\/a><\/li>\n\n\n\n
- VAT return example<\/a><\/li>\n\n\n\n
- VAT return boxes<\/a><\/li>\n\n\n\n
- Different VAT accounting schemes<\/a><\/li>\n<\/ul>\n<\/div>\n<\/div>\n\n\n\n
Keep reading to learn more about filing and paying VAT, or take a look at our other guides on how to register for VAT<\/a>, how much VAT costs<\/a> and Making Tax Digital for income tax<\/a>. <\/p>\n\n\n\n
What is a VAT return? <\/h2>\n\n\n\n
A VAT return is a digital form you send to HMRC showing how much VAT you owe. <\/p>\n\n\n\n
It includes how much VAT you\u2019ve charged on sales minus the amount you can reclaim on business-related goods and services you\u2019ve paid for.<\/p>\n\n\n\n
It\u2019s a form that\u2019s usually submitted every three months, based on your business\u2019s accounting period. <\/p>\n\n\n\n
Making Tax Digital for VAT (how to record, file, and pay VAT)<\/h2>\n\n\n\n
You\u2019ll be automatically registered for Making Tax Digital when you register for VAT<\/a> \u2013 unless you apply for an exemption. <\/p>\n\n\n\n
HMRC introduced Making Tax Digital for VAT gradually from 1 April 2019, and it\u2019s applied to all VAT-registered businesses from 1 April 2022. <\/p>\n\n\n\n
All VAT-registered businesses are required to use MTD compatible software and keep records with a MTD account.<\/p>\n\n\n\n
Applying for an exemption <\/h3>\n\n\n\n
You might be able to apply for a MTD exemption if it\u2019s not \u2018reasonable or practical for you to use computers, software, or the internet\u2019. The government website gives a few examples of when you might be exempt:<\/p>\n\n\n\n
- \n
- because of your age, health condition, disability, or where you live<\/li>\n\n\n\n
- you object to using computers on religious grounds<\/li>\n\n\n\n
- you don\u2019t have access to the internet <\/li>\n<\/ul>\n\n\n\n
If you\u2019ve cancelled your VAT registration or your business is subject to an insolvency process, then you\u2019ll already be exempt from Making Tax Digital for VAT.<\/p>\n\n\n\n
How to keep digital records <\/h3>\n\n\n\n
All VAT-registered businesses need to keep digital records and send digital VAT returns.<\/p>\n\n\n\n
Your first step is to start using compatible software<\/a> to submit your returns. This pulls information from your digital records, which need to be preserved for up to six years.<\/p>\n\n\n\n
Digital records you need to keep include:<\/strong><\/p>\n\n\n\n
- \n
- business name and contact details<\/li>\n\n\n\n
- VAT number and details of any schemes used<\/li>\n\n\n\n
- VAT on goods and services you supply (supplies made)<\/li>\n\n\n\n
- VAT on goods and services you receive (supplies received)<\/li>\n\n\n\n
- adjustments to returns<\/li>\n\n\n\n
- time of supply (tax point) <\/li>\n\n\n\n
- rate of VAT charged on supplies made<\/li>\n\n\n\n
- reverse charge transactions (if your software doesn\u2019t record them, you need to record them twice as a supply made and a supply received)<\/li>\n\n\n\n
- daily gross takings (DGT) if you use a retail scheme<\/li>\n\n\n\n
- purchases of assets you can reclaim tax on if you use the Flat Rate Scheme<\/li>\n\n\n\n
- value of sales made and total output tax on Gold Accounting Scheme purchases (if applicable)<\/li>\n\n\n\n
- documents covering multiple supplies made or received on behalf of your business (by volunteers, third party businesses, or employees)<\/li>\n<\/ul>\n\n\n\n
You can use spreadsheets to calculate or summarise VAT transactions and work out what information you need to send to HMRC. But ultimately you\u2019ll need to use compatible software to send that information. <\/p>\n\n\n\n
\nIf you use different software to keep records and submit your returns, you might also need what HMRC calls \u2018bridging software\u2019 to digitally link them together. <\/p>\n<\/div>\n\n\n\n
Best software for Making Tax Digital for VAT<\/strong><\/h2>\n\n\n\n
HMRC has a list of compatible software<\/a> you can use, including Xero, Quickbooks, and Zoho. <\/p>\n\n\n\n
You can link software by emailing records<\/strong>, linking cells in spreadsheets<\/strong>, and downloading and uploading files<\/strong>.Many businesses choose to pay an accountant<\/a> to take the stress out of organising tax returns and paying their VAT bill. But if you\u2019re doing it yourself then read our guide to the best accounting software<\/a>.<\/p>\n\n\n\n
\nHow to file a VAT return<\/h2>\n\n\n\n
All VAT returns must be filed online:<\/p>\n\n\n\n
- \n
- using your VAT online account<\/a><\/li>\n\n\n\n
- through third-party VAT return accounting software<\/li>\n\n\n\n
- or with help from an accountant<\/li>\n<\/ul>\n\n\n\n
It’s important to note that you can only use the government’s VAT online account if you use the annual accounting scheme.<\/p>\n\n\n\n
Filing your return by post is only allowed if you have an exemption from Making Tax Digital for VAT<\/a>.<\/p>\n<\/div>\n\n\n\n
How to submit a VAT tax return<\/h2>\n\n\n\n
If your business has registered for VAT then you\u2019ll need to file a VAT return and pay HMRC, which is usually every three months.<\/p>\n\n\n\n
To submit your VAT return, here\u2019s what you need to do: <\/p>\n\n\n\n
\n\n\n1.<\/strong><\/p>\n\n\n\n
Calculate your VAT liability (how much you owe)<\/p>\n<\/div>\n\n\n\n
\n2.<\/strong><\/p>\n\n\n\n
Fill in your VAT return form<\/p>\n<\/div>\n\n\n\n
\n3.<\/strong><\/p>\n\n\n\n
Submit your VAT return online<\/p>\n<\/div>\n\n\n\n
\n4.<\/strong><\/p>\n\n\n\n
Pay your VAT bill <\/p>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n
\n<\/div>\n\n\n\nWhen you file a VAT return, you\u2019re telling HMRC how much VAT you\u2019ve charged and paid to other businesses (we also have a guide on how to work out how much VAT to add to your prices<\/a>).<\/p>\n\n\n\n
It\u2019s easy to get confused by the boxes on a VAT return and what information you need to include. The government website has more information about sending a VAT return<\/a>.<\/p>\n\n\n\n
Make sure you submit your VAT return on time to avoid penalty points<\/a> and late payment penalties<\/a>.<\/p>\n\n\n\n
How to pay VAT online<\/h2>\n\n\n\n
There\u2019s a few ways you can pay your VAT bill to HMRC: <\/p>\n\n\n\n
Direct Debit \u2013 <\/strong>you can use your VAT online account to set up a Direct Debit. This should be set up at least three working days before you file your VAT return. <\/p>\n\n\n\n
Payment on account \u2013 <\/strong>you can set up advance payments towards your VAT bill, where HMRC will work out instalments. <\/p>\n\n\n\n
Bank transfer<\/strong> \u2013 pay HMRC from a UK bank account using the bank details on the government website<\/a>. <\/p>\n\n\n\n
Debit or corporate credit card \u2013<\/strong> pay online using a debit or credit card. There\u2019s a fee if you pay with a corporate credit or debit card, but no fee if you pay with a personal debit card. <\/p>\n\n\n\n
Standing order \u2013<\/strong> if you use the annual accounting scheme, then you may choose to pay by standing order (you\u2019ll need to request this payment method on your application form for the annual accounting scheme). <\/p>\n\n\n\n
- using your VAT online account<\/a><\/li>\n\n\n\n
- What happens if you miss the VAT return deadline? <\/a><\/li>\n\n\n\n
- Making Tax Digital for VAT (how to record, file and pay VAT)<\/a><\/li>\n\n\n\n
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