How Do You File VAT Returns?

If you are working in the capacity of an accountant or as a business owner in the UK, you are aware of the importance of VAT returns filing. Even if you are new to navigating the value-added tax, we have got you covered, fear not! Filing for value-added tax is a complex and daunting task, especially in the case of beginners. By filing VAT, you are likely to inform HMRC about your VAT activities. It is a very crucial part of the business in the UK.

You can avoid any kind of penalties or fines in the UK if you aim to file the VAT returns on time and do not miss the deadlines. In this discussion, we will focus on all the steps to filing VAT returns. From understanding the basics of value-added tax to the process of filing online, we have got it all covered for you. You can be a pro in the world of VAT or a newbie, we aim to make the VAT filing process stress-free for you. So let us get started!

 

Who Needs VAT Returns Filing?

If you are associated with the business in the UK and your turnover exceeds the limit of the threshold, you are obliged to register for VAT and file returns on time. Most of the businesses if they are sole traders, limited companies or partnerships are obliged to file VAT returns.

Moreover, some companies voluntarily opt for VAT filing because this is beneficial in several ways. You are in a good position to reclaim VAT on the business expenses. You can even expect your business threshold to exceed the limit soon.

Certain businesses and individuals must also file VAT returns, including:

• Non-UK Businesses: If you’re not based in the UK but supply goods or services here, you may need to register for VAT.
• Charities and Non-Profit Organisations: Some charities and non-profit organisations must register for VAT, even if their turnover is below the threshold.
• Businesses with VAT-Exempt Supplies: If your business makes VAT-exempt supplies (e.g., healthcare, education), you might still need to file VAT returns.

Some businesses are exempt from VAT or don’t need to file returns, including:

• Small Businesses with Low Turnover: If your turnover is below £1 million, you might be eligible for the VAT simplified accounting scheme.
• Certain Financial Services: Some financial services, like insurance and banking, are exempt from VAT.

How Do You File VAT Returns Online?

Here is a step-by-step breakdown of how to file VAT returns online in the UK when your business turnover exceeds the threshold limit.

Step 1: Log in to Your HMRC Account

You need to know the credentials of the government gateway ID. Now go to the HMRC website and log into your account. If you have not registered yet, then get the account first and do the procedure.

Step 2: Access the VAT Return Form

Now when you’re logged in, click on the option VAT and select the option file VAT returns. This is done from the dropdown menu. Choose your period of VAT return accurately and click on Start Now. This will give you access to the online form.

Step 3: Enter Your VAT Return Details

After getting the form, fill in the required information. This may include VAT rates applied, any other corrections or adjustments, the total value of purchase, total value of sales, and VAT payable.

Step 4: Submit Your VAT Return

Now take your time to review the values and look for whether or not there are any mistakes. Now click to file your VAT return online.

Step 5: Make Payment or Request a Refund

If you aim to pay VAT, choose your option from online banking, debit card, or credit card.

Step 6: Keep a Record of Your Submission

You can get the print of your VAT return filing to have a record. Keep the reference number of your VAT returns for the future.

 

The Bottom Line

In conclusion, it is a daunting task to handle VAT returns filing in the UK. However, if you follow the outlined steps in this discussion, you will be a VAT pro in no time. In case your threshold exceeds a certain limit, you need to register for VAT. You can use the HMRC portal to start the process of VAT filing once you are done gathering information, required documents, and records. However, you need to be mindful of common mistakes when filing VAT returns.

This can include VAT rate errors, late payment or late filing in this regard. To keep everything up to date and accurate, use the guidance provided by HMRC. Do not hesitate to seek professional help if you need it. This will help you to stay informed and VAT complaints while avoiding mistakes and penalties. So get up now and take control of your VAT obligations, meet the deadlines and stay confident being a VAT pro. This will further allow you to grow your business with confidence.

Disclaimer: The information about VAT returns filing is provided in this article including text and graphics. It does not intend to disregard any of the professional advice.