Filing your VAT Return might seem like a complicated task, but it doesn’t have to be. Whether you’re experiencing this process for the first time or just looking for an easier way to get it over with, this step-by-step guide will truly be of help.
We’ll take you through what you need to know about filling in your VAT Return: what it is, when and how to submit it, and even where to get help if you need it. By the end of this guide, you’ll feel confident in tackling your VAT Return to make sure your business stays compliant with HMRC’s rules.
What is a VAT Return?
First, let’s clarify what a VAT Return actually is. In simple terms, a VAT Return is a report that VAT-registered businesses have to submit to HMRC-usually every three months. It informs HMRC how much VAT you have charged your customers and how much VAT you have paid on your business purchases. This, basically, is how much VAT you owe HMRC or whether you are entitled to a refund.
When you submit a VAT Return, you will be declaring to HMRC the following:
- The total sales and purchases that your business has made during the period.
- The VAT amount you need to pay to HMRC.
- The amount of VAT you can reclaim.
- Your total VAT liability or refund is due.
Think of it like this: Your VAT Return is a summary of the VAT you’ve collected from sales and the VAT you’ve paid on supplies. If you’ve received more than you paid, you’ll have to pay the difference to HMRC. And in turn, if that’s vice versa, then you might be due for a refund.
Source: https://www.gov.uk/browse/tax/vat
When to Submit VAT Return?
You need to know when it’s due. Most businesses have to file their VAT Returns with HMRC once a quarter. So, you have four main dates in one single year that you should keep in mind. The deadlines are based on your VAT accounting period, which will be set up when you first register for VAT. Usually, it’s one month and 7 days after the accounting period ends.
Here’s a quick tip: As soon as you know your VAT periods, mark those dates in your calendar or set reminders on your phone. Missing a deadline can result in penalties or interest charges from HMRC, and no one wants that.
To keep things simple, here’s what you should do:
- Identify your VAT accounting periods.
- Note down the due dates for each quarter.
- Make sure your financial records are up-to-date well in advance of the deadline.
- Check the VAT Payment Deadline Here.
This keeps you ahead in making sure you don’t miss a submission and makes sure your business is in the good books of HMRC.
How to Calculate VAT Return and Where to Submit it
Having looked at when to submit your VAT Return, let’s talk about how to calculate it. It is not as complicated as that sounds.
Here’s how to calculate your VAT Return step-by-step:
1. Calculate Your Sales (Outputs):
Start by summing up all the sales you made during the VAT period, inclusive of the VAT charged to your customers. This is referred to as your output tax.
2. Add Up Your Purchases (Inputs):
After that, sum up all the purchases your business has bought, inclusive of the VAT paid on that particular purchase. That is what is referred to as your input tax.
3. Work Out Your Net VAT:
Deduct input tax (VAT on purchases) from output tax (VAT on sales). Where the output tax is greater, this amount is payable to HMRC; where the input tax is greater, this amount is refundable to you from HMRC.
4. Double-Check for Adjustments:
You may have to make adjustments against discounts, returned goods, or bad debt. This may also alter your final VAT payables or receivables.
Once you have made your calculations, now is the time to submit the VAT Return. You can do this online through the Government Gateway or use compatible accounting software. It is quicker if you submit it online, ensuring that your information arrives on time to HMRC.
How to Fill in VAT Return Online
Ready to fill in your VAT Return? Follow these steps to fill it out online:
1. Log in to HMRC:
Go to the Government Gateway and log in to your HMRC account. If you haven’t already got one, you’ll have to set up one.
2. Go to ‘Submit VAT Return’:
Once you’re logged into your account, select the VAT section. Now, click on the option that says ‘Submit VAT Return’.
3. Enter Your Details:
You will be required to fill in various fields with your business’s financial data, such as your total sales, total purchases, VAT on sales, and VAT on purchases.
4. Review Your Information:
Before you hit ‘Submit,’ go through everything to make sure your entries are correct. Any mistakes may further lead to delays or, worse still, penalties.
5. Submit Your Return:
Once you have reviewed it, submit your VAT Return. You’ll receive confirmation that HMRC has received this. Make sure to keep this for your records.
6. Keep Digital Records:
Don’t forget to save a copy of your VAT Return and any related documents. HMRC requires all businesses to keep digital records for at least six years.
It’s relatively easy to complete your VAT Return online, but the key to this is being accurate. It’s always worth spending a little time double-checking figures now rather than later facing a whole heap of hassle.
Why Choose MeticMinds?
No one likes to be on the wrong side of HMRC, and when it comes to VAT Returns, accuracy and compliance are of the essence. This is where outsourcing your VAT accounting with experts like MeticMinds makes all the difference. Here’s how we can help:
Budget-Friendly Expertise: Outsourcing to MeticMinds means cost-effective VAT accounting, rather than having to pay extra for an excess of internal resources that may not be needed during quieter times.
Reduces Team Burden: Empower your team to focus on strategic business goals by letting MeticMinds take care of time-consuming complexities in VAT accounting.
Smooth MTD Compliance: Be fully compliant with HMRC’s Making Tax Digital requirements without the need for new systems or extensive staff training.
Expert VAT Scheme Selection: Get expert advice in selecting and operating the most relevant and efficient VAT scheme for your business-to-business operations.
Reclaim VAT Where Applicable: Ensure proper VAT treatment and claim the maximum possible VAT with proficient VAT Outsourcing Services from MeticMinds.
Still Confused? Here are some Key Tips for Choosing the Right VAT Outsourcing Partner.
Conclusion
Completing your VAT Return doesn’t have to be stressful. With this step-by-step guide, you now know how to do everything from what a VAT Return is, when it has to be submitted, and how it must be submitted.
But you don’t need to do it alone, and that is where MeticMinds comes in to make the whole process hassle-free with expert support and services, whether you are an experienced business person or just starting with VAT.
By outsourcing your VAT Return to MeticMinds, your business is protected not just against any potential HMRC penalties but is also freed for more worthy initiatives and resources that are important to grow your business. Let us deal with the complexities of VAT accounting while you concentrate on your core business goals.