VAT Return Services

A VAT (Value Added Tax) return is a regular report that businesses registered for VAT in the United Kingdom submit to HM Revenue and Customs (HMRC) to report their VAT-related transactions. VAT returns are typically filed quarterly, although some businesses may be required to file monthly or annually, depending on their turnover or specific circumstances.

By submitting VAT returns, businesses fulfil their legal obligations, report their VAT liabilities accurately, and ensure compliance with VAT regulations in the UK. Seeking guidance from tax professionals can help businesses understand the requirements and procedures for VAT returns.

Here at Cannytax, our qualified accountants provide a range of VAT return services to suit your unique business needs. Need help? Call us 0203 002 2027.

What to include in a VAT Return

You’ll need to include:

• your total sales and purchases
• the amount of VAT you owe
• the amount of VAT you can reclaim
• the amount of VAT you’re owed from HM Revenue and Customs (HMRC) (if you’re reclaiming VAT on business expenses)

You must include the VAT on the full value of what you sell, even if you:

• receive goods or services instead of money – for example, if you take something in part-exchange
• have not charged any VAT to the customer – whatever price you charge is treated as including VAT

Key points about VAT returns

Here are some key points about VAT returns:

• VAT Reporting Period
• VAT Reporting Period
• Input VAT and Output VAT
• Calculating VAT Liability
• VAT Rates and Categories
• Submitting VAT Returns
• Record-Keeping

VAT Reporting Period

VAT returns cover a specific reporting period, typically a calendar quarter (three months). The reporting period is determined by the business’s VAT registration and may align with the standard VAT accounting periods or be customized based on the business’s needs.

VAT-Registered Businesses

VAT returns are filed by businesses that are registered for VAT in the UK. Businesses with annual taxable turnover exceeding the VAT threshold (currently £85,000 as of 2023) must register for VAT and submit VAT returns. However, businesses with turnover below the threshold may choose to register voluntarily.

Input VAT and Output VAT

VAT returns require businesses to report their input VAT and output VAT for the reporting period. Input VAT is the VAT paid on business purchases and expenses, while output VAT is the VAT charged on sales and services provided by the business.

Calculating VAT Liability

Businesses calculate their VAT liability by subtracting the input VAT from the output VAT. If the output VAT exceeds the input VAT, the business owes VAT to HMRC. Conversely, if the input VAT is greater than the output VAT, the business may be eligible for a VAT refund.

VAT Rates and Categories

VAT returns require businesses to report VAT amounts based on the applicable VAT rates and categories for different goods and services. In the UK, there are multiple VAT rates, including the standard rate (currently 20%), reduced rates (5% for certain items), and zero rates (0% VAT).

Submitting VAT Returns

VAT returns are typically submitted online through HMRC’s online portal, using the government’s Making Tax Digital (MTD) system. Businesses must ensure that VAT returns are submitted and any VAT owed is paid within the specified deadlines.

Record-Keeping

Businesses must maintain accurate records of their VAT transactions, including invoices, receipts, and other relevant documents, to support the figures reported in the VAT return. These records should be retained for a specific period, usually six years.