Introduction

Value Added Tax (VAT) is a tax on the value added to goods and services during their production and distribution. In the UK, businesses that are registered for VAT must submit regular VAT returns to HM Revenue and Customs (HMRC). Failing to submit VAT returns accurately and on time can result in hefty penalties and legal action. Therefore, it’s vital for businesses to understand the VAT return submission process and ensure they have all the necessary documents. In this blog post, we detail the steps to submit VAT returns in the UK, the required documents, submission frequency options, and tips to ensure an accurate VAT return submission.

VAT Return Submission Process in UK

Submitting your VAT return in the UK is a necessary task for all VAT-registered businesses. Here’s a step-by-step process to follow:

Step 1: Calculate VAT due

Firstly, you need to calculate the amount of VAT due on your sales and purchases during the relevant period. You can do this by subtracting the VAT you’ve paid on your purchases from the VAT you’ve charged on your sales.

Step 2: Complete the online form

Next, you need to complete the online VAT return form on HMRC’s website. You’ll need to enter the amount of VAT due, the VAT rate, and the relevant period.

Step 3: Submit your VAT return

You can submit your VAT return online via HMRC’s website. When submitting, double-check that all figures are correct and accurate, and keep a copy of your submission for your records.

It’s important to keep accurate records of all your business transactions as HMRC may ask to see them in the future.

Remember, inaccurate or late submissions can result in penalties and legal action from HMRC. So, make sure to complete and submit your VAT return on time and check for any errors.

Important Documents Required for VAT Return Submission

When submitting a VAT return in the UK, there are certain documents that you must have on hand to ensure your calculations are accurate. These documents include:

• Sales invoices – invoices for all goods and services sold during the VAT period.
• Purchase invoices – invoices for all goods and services purchased during the VAT period.
• Import/export documents – if you import or export goods from outside the EU, you will need to provide documentation that shows the value of the goods and the amount of VAT paid.

Keeping copies of these documents is important for record-keeping purposes, and they may be requested by HMRC in the event of an audit.

It is also recommended that you keep a ledger of all VAT transactions, including any adjustments or corrections you make throughout the VAT period.

By keeping accurate records, you can ensure that your VAT return submission is as accurate as possible and avoid potential penalties from HMRC.

VAT Return Submission Deadline and Penalties

Submitting your VAT return on time is crucial to avoid potential penalties and legal action from HMRC. The deadlines for submitting VAT returns vary depending on the frequency and payment method you have chosen.

• If you submit VAT returns annually, the deadline for online submissions and payments is 12 calendar months after the end of your accounting period.
• If you submit VAT returns quarterly, the deadline for online submissions and payments is one calendar month and seven days after the end of your accounting period.
• If you submit VAT returns monthly, the deadline for online submissions and payments is one calendar month and seven days after the end of your accounting period.
• If you pay by direct debit, the deadline is extended by three working days.

It’s important to note that late submission of VAT returns can lead to financial penalties. If you miss the deadline, HMRC may send you a penalty notice. The amount of the penalty will depend on how late the return was submitted and the value of the VAT due. The penalty can range from £100 to £400.

If you continue to miss deadlines or fail to submit your VAT returns altogether, HMRC may take legal action against you, which can result in higher fines and even prosecution.

Make sure to always submit your VAT return on time to avoid any potential issues and penalties.

How to Register for VAT in the UK

Registering for VAT in the UK is a fairly straightforward process. Here are the steps to follow:

1. Determine if your business needs to be VAT-registered. Your business must register for VAT if your VAT-taxable turnover is more than £85,000 in a 12-month period. If your business’ turnover is less than this, VAT registration is voluntary, but you can still register if you wish to do so.
2. Visit the HMRC website and register for VAT online. You will need your business details, including your VAT number, company registration number, and bank details. You’ll also need to provide details about the nature of your business, such as its trading activities and the types of products or services it sells.
3. Wait for HMRC to process your registration. Once you have submitted your registration form, HMRC will review your application and contact you if they need more information. It typically takes a few weeks for your registration to be processed.
4. Receive your VAT registration certificate. Once HMRC has accepted your registration, they will send you a VAT registration certificate. This certificate contains your VAT registration number and other important information.
5. Begin charging and claiming VAT. With your VAT number, you can start charging VAT on your sales and claiming back VAT on your purchases.

Remember, once you’re registered for VAT, it’s important to stay on top of your VAT responsibilities. Make sure you submit accurate VAT returns on time and keep accurate records of your VAT transactions.

VAT Return Submission Frequency Options in UK

As a UK VAT-registered business, you have the freedom to choose your VAT return submission frequency. Here are the options available to you:

• Monthly VAT Returns

  If your VAT payments exceed £100,000, you must submit VAT returns monthly.

• Quarterly VAT Returns

  Most businesses submit VAT returns quarterly. This option is suitable for businesses with VAT payments below £100,000.

• Annual VAT Returns

  If your business has a turnover of less than £1.35 million and your VAT liability is less than £2,000 per year, you can submit annual VAT returns.

• Annual Accounting Scheme

  This scheme allows businesses to submit only one return per year, but make advance payments towards their VAT during the year. Eligibility requirements apply.

It’s important to choose the right VAT return submission frequency for your business. Consider your VAT obligations, cash flow, and administrative capabilities before making a decision.

Tips to Ensure Accurate VAT Return Submission

• Double-check calculations: It’s important to be meticulous when calculating VAT. Check and re-check your calculations to avoid mistakes and potential penalties.
• Keep accurate records: Keep all necessary documents and records, such as sales invoices, purchase invoices, and import/export documents. This is important both for accurate VAT calculations and potential HMRC audits.
• Seek professional advice: If necessary, seek professional advice to ensure that your VAT return is accurate and compliant with regulations.
• Avoid common mistakes: Be aware of common mistakes like claiming non-deductible expenses or using incorrect VAT rates. Double-check everything before submitting your VAT return.

By following these tips, you can ensure that your VAT return submission is error-free, timely, and compliant with regulations. This can help you avoid penalties and maintain a good relationship with HMRC.

Conclusion

Submitting your VAT return in the UK can seem like a daunting task, with strict deadlines and important documents to keep track of. However, by following the step-by-step process, keeping accurate records, and understanding the necessary documents, you can ensure a smooth and accurate submission. Remember to stay on top of your VAT responsibilities, register for VAT if necessary, and choose the submission frequency that aligns with your business needs. By putting in the effort to submit your VAT return correctly and on time, you can avoid potential penalties and legal action from HMRC. If you need more guidance or support, don’t hesitate to seek professional advice to ensure that your VAT return submission is error-free and up to date with the latest regulations.
Account Ease provides online VAT return services to businesses in the UK. They have a team of experienced professionals who handle VAT returns on behalf of businesses, ensuring that the process is seamless and worry-free. By using their services, businesses can avoid the hassle of dealing with VAT returns themselves and focus on running their operations. Account Ease’s VAT return services are designed to be easy to use and straightforward, allowing businesses to upload their invoices and expense data quickly and securely through their online platform. The team at Account Ease then takes care of the rest, including calculations, completion of the necessary paperwork, and submission of the VAT return to HM Revenue and Customs on behalf of the business. Overall, Account Ease makes the VAT return process simple, efficient, and stress-free for businesses in the UK.