To do a VAT return in the UK, you need to follow these steps: 

 1) Collect all your sales and purchase records, including invoices and receipts.  

2) Calculate the VAT you’ve charged on your sales and paid on your purchases.  

3) Complete your VAT return online using HM Revenue and Customs (HMRC) online services.  

4) Submit the return and pay any VAT due by the deadline.  

Remember to keep accurate records and consult HMRC guidelines for specific details. 

You must pay Value Added Tax on every purchase of products or services, whether you are a person or a company. In the United Kingdom, three types of VAT rates are charged as follows: 

Standard rate:  

Most goods and services. 

Reduced Rate:  

Some goods and services e.g., children’s car seats and residential energy 

Zero Rate:  

Zero rates are charged on goods and services like food and children’s clothes. 

Scheme 1 – Standard VAT Accounting 

Standard VAT is 20%, which means that you claim VAT on purchases made. 

VAT returns are submitted quarterly 

This is completed online and must show the output and input tax for that quarter. 

You can reclaim VAT for invoices raised in that quarter. 

Scheme 2 – Flat Rate VAT Scheme 

Provided as an incentive to simplify taxes allowing you to charge VAT on invoices at 20% but only pay HMRC at a lower rate 

For example, IT Contractors have a FLAT rate of 13.5% in their 1st year of trading and 14.5% after this. 

This ensures that contractors raise extra income. 

Certain thresholds exist, and your accountant will aid you with staying within these boundaries. 

Scheme 3 – Cash Accounting Scheme 

You CANNOT use this scheme if your turnover is more than £1.35 million. 

This scheme is advantageous for businesses that pay VAT only when clients have paid for goods/services. 

However, VAT cannot be claimed for goods bought for the company if they have not yet been paid for 

This is completed online and must show the output and input tax for that quarter. 

Remember that VAT cannot be paid for purchases/services that have not been paid for 

Calculating VAT returns involves two main steps. 

First, calculate the VAT charged on your sales by multiplying the taxable amount by the applicable VAT rate (e.g., 20%).  

Second, calculate the VAT paid on your purchases by adding up the VAT amounts from your supplier invoices.  

Finally, subtract the total VAT paid on purchases from the total VAT charged on sales to determine the VAT due or refundable. Always consult HMRC guidelines or seek professional advice for accurate calculations.

Our team of highly qualified experts do year-round VAT  reporting and prepares returns on your behalf. We will submit it online using MTD-compliant software. Our accounting software, tax experts and dedicated client manager are exactly what you need to stay compliant with HMRC’s Making Tax Digital regulations. 

Once you have chosen the right VAT  scheme, we will guide you through the registration process in real time and advise you on how to switch if you plan to move to a more tax-efficient scheme. 

Lanop Accountants eliminates the need to search for an all-encompassing accountancy firm. Our corporate headquarters in Putney, London, provide practical and efficient solutions to all your accounting needs. 

Our skilled tax and finance professionals work diligently to make your life simpler by reducing financial stress and making business models more lucrative and efficient in accordance with up-to-date regulations. 

The VAT return is typically due every three months, following your ‘accounting period.’ If you are VAT registered, it is mandatory to submit a VAT return, even if you have no VAT to pay or reclaim. The deadline for submitting the return online and paying HMRC is usually one calendar month and seven days after the end of your accounting period.  

Be sure to allow sufficient time for the payment to reach HMRC’s account. Always verify the specific dates according to your accounting period and consult HMRC guidelines for accuracy.