VAT is a tax which is charged on goods and services provided by businesses in the UK, and all VAT registered businesses must complete and submit a VAT return document to Her Majesty’s Revenue and Customs (HMRC).
What is a VAT return?
The VAT return document must be filed quarterly by businesses and shows the calculation of VAT due on sales minus the amount of VAT reclaimable on purchases. The end result is what is required to be paid to, or refunded by, HMRC.
For example, if you collected £1,000 in VAT and paid £200 in VAT, you would owe HMRC £800.
It is important to be aware that:
- Vat can be charged at different rates
- You cannot always claim Input VAT
- There are specialist VAT schemes available to certain businesses. Contact us for more information which could relate to your business.
How to complete a vat return
In order to submit your return, you will need to gather your quarterly records in order to calculate your claim. You will require the following figures:
- Total sales
- Output VAT (VAT collected on sales)
- Total purchases
- Input VAT (VAT you can claim back)
You will not be required to submit VAT invoices, but this could be requested by HMRC further down the line. We would advise organising your invoices in preparation.
What is Output VAT?
This is the VAT calculated and charged on the sale of goods and services if you are VAT registered. Output VAT is calculated when goods and services are withdrawn for private use from a registered business.
What is Input VAT?
This is defined as the VAT applied to company purchases when VAT liable goods or services are purchased. In a nutshell, this is VAT that was paid by your business on particular transactions that can be later deducted on your VAT return.
Once you have your VAT bill calculated, you are required to pay it within a month and seven days. This can be done manually or through direct debit, and we advise doing this on time to avoid any penalties.
If you have paid more VAT than you have collected, HMRC will refund the amount after you submit your return.
How we can help
At Lee Coombes Accountancy, we can provide advice and aid with completing your VAT return, taking the hassle away from you so you can concentrate on what matters most: your business.
You can access guidance on VAT from HM Revenue & Customs here. For further assistance, please contact us on 01792 346272 or email email@example.com and our team of VAT specialists can answer any queries.