Home > VAT > Preparing Your VAT Return

Preparing Your VAT Return

By: J.A.J Aaronson - Updated: 2 Sep 2012 | comments*Discuss
 
Vat Accounting Vat Return Vat Flat Rate

Preparing a VAT return is amongst the most dreaded tasks faced by any small business owner. There is a sense that dealing with your VAT liabilities is significantly more difficult, and more time consuming, than fulfilling your income or Corporation Tax obligations. While this may be true, with a bit of guidance and some forethought you can take some of the hassle out of completing your VAT return.

There are a few key things to note about the VAT return. To begin with, you will have to complete one of these forms at the end of each VAT period. VAT periods can differ depending on the company’s financial arrangements, but you will generally be required to file a return every three months.

You should also note that, if your annual turnover is less than £150,000, you can apply for the Flat Rate Scheme. Under this arrangement you can calculate your VAT liability as a percentage of your turnover. This is a simplified accounting method for firms with small turnovers; the remaining advice in this article applies to those who are not utilising the Flat Rate Scheme.

Online Filing

From 1 April 2010, most VAT-Registered Businesses have to submit online VAT returns and pay electronically. And by April 2012, this will apply to all VAT-registered businesses. To submit online you will need a Government Gateway username. Your first step should be to apply for a username through the HMRC website. This comes by post and can take up to seven days to arrive, so don’t leave it until the last minute or you will miss the deadline.

Once you are logged into the system, you can start filling out your return. As you can see, it is remarkably simple. Boxes 1 to 3 require you to enter the amount of VAT you have charged your customers. Boxes 4 and 5 ask for the amount of VAT you intend to reclaim from purchases. Boxes 6 and 7 ask for details of your sales during the period, and Boxes 8 and 9 refer to sales made to other EU countries.

Record Keeping

Theoretically speaking, the VAT return should take you no more than half an hour. However, this is only possible if you have kept proper records during the rest of your VAT period. If you do not already have one, you should seriously consider investing in accounting software that calculates your VAT on a transaction-by-transaction basis. These tools provide you with the figures you need to fill in your VAT return, at the push of a button.

Finally, you should also keep a close eye on claimable expenditure that is not exclusively for business use. If you have any such expenditure (for example the purchase of computer equipment), you should keep careful records detailing the proportion of the expenditure that is business related. You may well be faced with an inspection at some point in the future, and it is vital that your records are in order in this event.

VAT accounting is a regular hassle that many small business owners have to go through. However, with some efficient record keeping and a helping hand from some software, it need not be the end of the world.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
Hi, if I don't register will I get into trouble? In a year I prob make about £8000 it's more a hobby than a business.
Dave - 17-Aug-12 @ 8:58 AM
Share Your Story, Join the Discussion or Seek Advice...
Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Latest Comments
  • JellyBean
    Re: Are DVLA Car Tax Rates Fair?
    A one-litre Ford Fiesta petrol Ecoboost at the average 12,000 miles per annum, puts out exactly the same CO2 in 12 months as, for…
    18 October 2019
  • Cherral
    Re: How Will My Second Job Be Taxed?
    I am a director of my husband's company getting paid £1500 per month. I would like to have a casual 25hr job at 8.60 per…
    16 October 2019
  • Lazarus
    Re: How Will My Second Job Be Taxed?
    I have two part time jobs 1st job 18hrs a week at £8.21 2nd job 12hrs a week at £8.65 an hour, both paid monthly... Anybody…
    1 October 2019
  • leigh
    Re: How Will My Second Job Be Taxed?
    I have been looking for a cleaning job two hours on a morning and two on an evening. I'm on working tax credits. I have been…
    26 September 2019
  • Bev
    Re: What is My Tax Code?
    My tax code is 506L which I think is incorrect. how do I check this?
    26 September 2019
  • davel
    Re: Paying for Training Can I Claim Tax Allowance?
    I have just paid for my son to carry out his pilot training £38,000 plus I have kept him for the last 2…
    24 September 2019
  • mac
    Re: How Will My Second Job Be Taxed?
    Hello, I have 2 jobs - 1 full time (my main job) through an employer that pays me £80k a year, then I have another, which…
    9 September 2019
  • Chris
    Re: How Will My Second Job Be Taxed?
    I'm an apprentice earning £8,482 a year. I also have a second job, 5 hours a week, earning £2,000 a year. As both wages total…
    8 September 2019
  • Laura
    Re: How Will My Second Job Be Taxed?
    Good afternoon, I have two full time jobs one 25,272 per year and second 24,591£ how much tax I pay in one year? . Thank you .
    7 September 2019
  • Jan
    Re: Payment of Pensions
    I would like the frequency of my State Pension payments changed to weekly from four weekly. How do I do this?
    30 August 2019