Guide to Filing Your VAT Return in the UK

Are you a UK business owner looking to file your VAT return hassle-free? Look no further! In this comprehensive guide, we’ll walk you through the process step by step, ensuring you understand every aspect of filing your VAT return efficiently. From understanding what a VAT return is to calculating VAT and knowing when to file, we’ve got you covered. Let’s dive in!

What is a VAT Return?
In the UK, Value Added Tax (VAT) is a consumption tax applied to goods and services. A VAT return is a form you must submit to HMRC detailing the amount of VAT you’ve charged and paid during a specific accounting period. This ensures that you’re accurately reporting your VAT liabilities and reclaiming any VAT you’re entitled to.

This report allows HMRC to keep track of the VAT you’ve charged your customers and the VAT you’ve paid on your business expenses.

1. How to File VAT Return in UK

Are you a UK business owner looking to file your VAT return
hassle-free? Look no further! In this comprehensive guide, we’ll
walk you through the process step by step, ensuring you understand
every aspect of filing your VAT return efficiently. From
understanding what a VAT return is to calculating VAT and knowing
when to file, we’ve got you covered. Let’s dive in!
What is a VAT Return?
In the UK, Value Added Tax (VAT) is a consumption tax applied
to goods and services. A VAT return is a form you must submit to
HMRC detailing the amount of VAT you’ve charged and paid during
a specific accounting period. This ensures that you’re accurately

2. reporting your VAT liabilities and reclaiming any VAT you’re
entitled to.
This report allows HMRC to keep track of the VAT you’ve charged
your customers and the VAT you’ve paid on your business expenses.
Here’s a breakdown of what a VAT return includes:
1. Recording VAT Transactions: Throughout your accounting
period, you record all sales and purchases involving VAT. This
includes any VAT you’ve charged on the goods or services you’ve
sold and any VAT you’ve paid on the goods or services you’ve
purchased.
2. Calculating VAT Due: Once you’ve recorded your VAT
transactions, you need to calculate the amount of VAT you owe to
HMRC. This involves subtracting the total VAT you’ve paid on
purchases (input tax) from the total VAT you’ve charged on sales
(output tax). The resulting figure represents the net VAT payable
to HMRC.
3. Reclaiming VAT: At the same time, you may also be eligible to
reclaim VAT on certain business expenses, such as office
supplies, equipment, or services. These are known as input tax
credits. Subtracting the input tax credits from the output tax
owed further refines the amount of VAT payable or refundable.
4. Filing the VAT Return: Once you’ve calculated your VAT
liabilities or entitlements, you need to submit your VAT return to
HMRC. This can typically be done online through HMRC’s

3. website or via compatible accounting software. HMRC sets
specific deadlines for filing VAT returns, typically on a quarterly
basis.
5. Payment or Refund: Depending on the outcome of your VAT
return, you may need to make a payment to HMRC for any VAT
owed. Conversely, if you’re entitled to a VAT refund, HMRC will
process the refund accordingly.
How is VAT Calculated?
Understanding how VAT is calculated is crucial for accurately
reporting it in your VAT return. In the UK, VAT is typically charged
at different rates:
 Standard rate: 20%
 Reduced rate: 5%
 Zero rate: 0%
Understanding how VAT is calculated is crucial for ensuring your
business meets its tax obligations accurately. Let’s simplify the
process into three steps:
Identifying Output VAT: This is the VAT charged to your
customers on your goods and services. It’s essentially the amount
you collect on behalf of HMRC. Accurately determining the
applicable VAT rate for each transaction is vital, as different goods
and services may have varying VAT rates.

4. Determining Input VAT: Input tax refers to the VAT you pay
when purchasing goods and services for your business. This includes
VAT paid on supplies like equipment, inventory, and services.
Maintaining thorough records of these transactions is essential to
claim back the input tax you’ve paid.
Calculating the Difference: To ascertain the VAT amount owed
to or reclaimable from HMRC, simply subtract the total input tax
(VAT paid) from the total output tax (VAT charged to customers).
This calculation reflects the VAT liability you’re required to report.
Output VAT (VAT charged to customers) — Input VAT (VAT paid on
purchases) = Amount of VAT owed to HMRC
When Should I File a VAT Return?
In most cases, VAT returns are filed quarterly, with deadlines falling
one month and seven days after the end of each quarter. However,
it’s essential to check your specific VAT accounting period as some
businesses may have different filing requirements. Additionally,
businesses registered for the VAT Annual Accounting Scheme or
VAT Flat Rate Scheme may have different filing deadlines.
How to Submit a VAT Return
Filing your VAT return doesn’t have to be daunting. HMRC provides
several methods for submitting your VAT return, including online
filing through the HMRC website or using compatible accounting
software. To file online, you’ll need to log in to your HMRC online

5. account, navigate to the VAT section, and follow the prompts to
complete and submit your return.
1. Using Accounting Software Compatible with Making
Tax Digital (MTD): If you’re embracing the digital age and
keeping up with Making Tax Digital requirements, using
accounting software that’s MTD-compatible is an efficient
option. These software solutions seamlessly integrate with
HMRC’s systems, allowing you to transfer your VAT data
electronically and submit your return with ease. Check if your
chosen software is MTD-compatible to ensure compliance and
streamline your VAT processes.
2. Appointing an Agent or Accountant: Delegating the task of
VAT return submission to qualified small business
accountants can save you time and ensure accuracy. By
appointing a professional, you entrust the responsibility of
preparing and submitting your VAT return to someone with
expertise in tax matters. They can handle the entire process on
your behalf, from ensuring compliance with HMRC regulations
to providing valuable advice on VAT matters tailored to your
business needs.
3. Using Your VAT Online Account (VAT Annual
Accounting Scheme Only): If you’re enrolled in the VAT
Annual Accounting Scheme, you have the option to submit your
VAT return through your VAT online account. This streamlined
method simplifies the process for businesses with annual

6. turnover below a certain threshold, allowing you to submit your
return conveniently online.
4. Postal Submission or Other Exempt Methods: In cases
where you have an exemption from Making Tax Digital for VAT,
you may still submit your return by post or another approved
method. HMRC provides alternatives for businesses that qualify
for exemptions, ensuring everyone can meet their VAT
obligations effectively.
Read more at, https://www.goforma.com/tax/file-vat-return
VAT return is a crucial document that ensures you’re accurately
reporting your VAT obligations to HMRC. By keeping meticulous
records of your VAT transactions and filing your VAT return on
time, you can avoid penalties and maintain compliance with HMRC
regulations. It’s an essential aspect of running a VAT-
registered business in the UK, helping you manage your tax
responsibilities effectively.