How to submit a VAT Return

The UK government imposes VAT on the purchase of a variety of goods and services. The businesses registered for VAT are subject to various requirements, such as regularly maintaining records, calculating, reporting, and paying their liabilities. Therefore, (VAT) return indicates the amount payable to HMRC. Thus, every business is required to submit a (VAT) return to HMRC after completing an accounting period. 

What is VAT return?

A (VAT) return is a form that determines the amount of tax paid to HMRC by a registered business. After calculating the tax input and output, companies must submit a (VAT) return every three months. These returns are distinct from the yearly tax returns filed by small businesses, where the tax depends on profits.

Most companies typically submit for VAT returns a year, after every three months. However, if your business is part of any accounting scheme, you must submit one return annually.

Methods to submit a VAT Return in the UK

The UK tax system has become one of the most digital systems in the world. HMRC has significantly driven to get everyone online to streamline and enhance the taxation system. 

Therefore, HMRC introduced the Making Tax Digital app for VAT-registered businesses whose annual turnover is more than 85,000 euros to submit their VAT returns. The following are the methods for submitting it;

1. Accounting software-MTD compatible

MTD-compatible software is primarily used to keep records and submit VAT returns. Once you sign up for Making Tax Digital, you must find compatible accounting software for further processing. It makes it easier for the business owner to manage their tax online.

2. Appointing a consultant 

HMRC also allows you to hire a consultant or tax adviser to manage your tax returns. He is called the trusted helper who can be your friend, relative, or professional accountant. Thus, he will review all your tax updates with HMRC on your behalf.

3. VAT online accounts

Businesses can also use VAT online accounts if they are part of online accounting schemes. There is an entirely different procedure for companies that are exempt from MTD. Therefore, they can use the online HMRC website to submit their VAT returns.

What is the VAT return due date?

VAT returns’ due dates depend entirely on the accounting period of a business. It is one month and seven days after completing an accounting period. Most companies file their VAT returns quarterly, while others opt for monthly payments, depending upon their frequent delays in the past. However, some prefer annual accounting schemes. 

The following are the due dates of returns if they choose monthly, quarterly, or annual accounting schemes. 

1. Quarterly payments

If you prefer quarterly returns in the UK, you must submit them one month and seven days following the end of the quarter. For instance, if your quarter ends on 30 April 2023, the due date for paying VAT to HMRC will be 7th June 2023.

2. Monthly payments

If any registered business in the UK has frequently missed deadlines, HMRC allows them to pay VAT bills every month. Thus, if their accounting period ends on 31 December 2023, they are liable to submit vat returns on 7 February 2023. Therefore, they are required to pay after one month and seven days of their payment period.

3. Annually payments

Some enterprises use annual accounting schemes to pay one VAT per year against four regular VAT returns. Such businesses are required to submit their VAT return two months after the accounting period. For instance, their accounting year ends on 5 April 2023; their deadline for submitting a VAT return will be 5 June 2023.

What happens if I miss the deadline for returns?

HMRC enacted new rules for the accounting year 2023 for the late submission of VAT returns. This system works on a point basis, where you receive one point for each late return. Once your business reaches the penalty threshold, you will be charged a fine of £200. You will have to pay the same penalty on subsequent late returns. The exciting thing is that your points can reset to zero if you file all the unpaid returns during your compliance period. Therefore, businesses are required to update their returns.

Submission	Penalty threshold	Period of compliance
Annually	2	24 months
Quarterly	4	12 months
Monthly	5	Six months

Can I submit a VAT return on the 7th? 

Every business must submit VAT returns after one month and seven days of their accounting period. Therefore, you can send your returns on the 7th day to HMRC. As a result, your record will update, and you may not be charged with any penalty.

FAQs

Q.1 Can I submit a VAT Return manually?

You can only file returns manually by post or any other method if you are exempt from the list of Making Tax Digital. Moreover, you can submit manually due to a lack of access to the internet or age restriction.

Q.2 Can I submit a VAT return without the software?

As per the recent change in April 2022, businesses cannot submit a VAT Return through their online accounts. They need MTD-compatible software to file VAT returns to HMRC unless they are exempt from the MTD threshold.

Q.3 How do I file my VAT return online?

There is a straightforward procedure to file a VAT return online. You only need the VAT number and an online account to file a value-added tax return using HMRC’s free online services.