VAT Returns

VAT Returns

A VAT (Value Added Tax) return is a report submitted to tax authorities (e.g., HMRC in the UK) that details the VAT a business has charged on sales and paid on purchases. It determines whether a business owes VAT to the government or is entitled to a refund.

A VAT (Value Added Tax) return is a report submitted to tax authorities (e.g., HMRC in the UK) that details the VAT a business has charged on sales and paid on purchases. It determines whether a business owes VAT to the government or is entitled to a refund.

A VAT (Value Added Tax) return is a report submitted to tax authorities (e.g., HMRC in the UK) that details the VAT a business has charged on sales and paid on purchases. It determines whether a business owes VAT to the government or is entitled to a refund.

Who Needs to File VAT Returns?

Businesses registered for VAT (typically those with taxable turnover above the VAT registration threshold).

Companies voluntarily registered for VAT, even if they are below the threshold.

Sole traders, partnerships, and corporations that meet VAT requirements.


What’s Included in a VAT Return?


A standard VAT return typically includes:

  • Total Sales & VAT Collected: The VAT charged on goods and services sold (output VAT).

  • Total Purchases & VAT Paid: The VAT paid on business-related expenses (input VAT).


VAT Owed or Reclaimed: The difference between output VAT and input VAT determines whether the business must pay VAT or claim a refund.

Exempt & Zero-Rated Sales: Transactions that are VAT-exempt or charged at 0%.

VAT on EU or International Transactions: If applicable, special VAT rules may apply.


How to Submit a VAT Return

  • Calculate VAT Figures: Use accounting records or software.

  • Use HMRC’s Online Portal: In the UK, VAT-registered businesses must submit returns via Making Tax Digital (MTD)-compliant software.

  • Pay VAT Due: If output VAT exceeds input VAT, the business must pay the difference.

  • Claim a Refund: If input VAT is higher, the business can reclaim the difference.


VAT Return Deadlines

  • Usually quarterly (every 3 months).

  • Deadlines depend on the VAT accounting period.

  • Payment is typically due one month and seven days after the end of the VAT period.


How to Simplify VAT Returns

  • Use Accounting Software – QuickBooks, Xero, and Sage can automate VAT calculations.

  • Keep Digital Records – Essential for MTD compliance in the UK.