VAT Returns

VAT Returns

A good accountant will help you comply with your VAT responsibilities. Whether you’re preparing your VAT return yourself or getting help, it’s useful to have a good understanding of how VAT affects your business.

Do I need to submit a VAT return?

You’ll only need to submit a VAT return if your business is VAT registered. You’ll only need to register for VAT if your turnover in the previous 12 months is more than the registration threshold.

You might also choose to register for VAT voluntarily, if submitting VAT returns can help you be more tax efficient!

If you register early, you’ll have to comply with the rules and submit VAT returns regularly just like you would following a compulsory registration. If you’re not VAT registered, and don’t need to be, then you won’t need to complete a VAT return.

How do I submit a VAT return?

The introduction of Making Tax Digital (MTD) is changing the way that VAT registered businesses must submit their returns.

At the moment, only businesses with a turnover above the registration threshold need to submit their returns under MTD rules. It becomes compulsory for all VAT-registered businesses from their first VAT period starting on or after 1st April 2022.

Under the rules, you must keep digital tax records, and submit your VAT return electronically – either with bridging software, or directly with MTD-approved software.

VAT Returns

Different types of VAT schemes, and what it means for your VAT return

There are multiple VAT schemes available, and registering to the one which most benefits your business can make a significant difference to your VAT return and, perhaps more importantly, your bill.

The HMRC website goes into more detail about the different types of VAT scheme available, though a good tax accountant will work with you to make sure that you’re on the best one.

Can I move to a different scheme?

Yes, you can move from one VAT scheme to another, change whether you use cash or accrual accounting, and even de-register for VAT completely. Just be aware that any of these changes must be done with very careful reference to the guidelines, and will affect how and when you make a VAT return.

If I reclaim VAT, will it be refunded?

It’s not often that VAT appears in the same sentence as ‘good news’, so this is a special occasion! If you’ve paid more VAT than you have collected in sales then yes, once you submit your VAT return HMRC will refund the difference to you. This usually takes place within 28 days.