How do I know my VAT return has been submitted successfully?

Your MTD-compatible software should provide a confirmation message once the return has been sent to HMRC. HMRC's online VAT account service will also show the status of your submitted returns.

What if I make a mistake on a submitted VAT return?

If you discover an error after submitting, you may be able to correct it on your next VAT return if it's below a certain threshold (e.g., £10,000 or 1% of box 6, up to £50,000). Larger errors usually require a separate disclosure to HMRC. Your accountant can advise on the correct procedure.

Can I change my VAT accounting period?

Yes, it is sometimes possible to change your VAT accounting period, but you need to apply to HMRC. There are specific rules and conditions for doing so, and it's often best to discuss this with your accountant first.

What happens if I pay my VAT late?

HMRC has a penalty system for late VAT payments. The longer you delay payment, the higher the penalty can be. You may also be charged interest on the overdue amount.

Do I need an accountant to submit my VAT return?

While you can submit your VAT return yourself using MTD-compatible software, many small business owners choose to use an accountant. An accountant can ensure accuracy, advise on VAT rules, handle submissions, and help you avoid common pitfalls.

What is the current VAT registration threshold?

The VAT registration threshold is currently £90,000 (per gov.uk, for 2026/27). If your VAT-taxable turnover exceeds this amount in a 12-month rolling period, you must register for VAT.

VAT returns: how to prepare and submit yours on time

Understanding Your VAT Obligations

If your business is VAT registered, you are legally required to submit VAT returns to HM Revenue & Customs (HMRC) regularly. This applies to limited companies, sole traders, contractors, and landlords whose VAT-taxable turnover exceeds the registration threshold.

Since April 2022, all VAT-registered businesses, regardless of turnover, must follow the Making Tax Digital (MTD) for VAT rules. This means you must keep digital records and submit your VAT returns using MTD-compatible software.

Preparing Your VAT Return

Before you can submit your VAT return, you need to gather specific financial information for the relevant accounting period, usually a quarter. Accurate record-keeping is crucial for this process.

Here's what you'll need:

Total sales and purchases: A summary of all your sales (output VAT) and purchases (input VAT) for the period.
VAT charged on sales (Output VAT): The total VAT you've charged to your customers.
VAT paid on purchases (Input VAT): The total VAT you've paid on goods and services for your business. You can usually reclaim this, subject to certain rules.
VAT due to or from HMRC: The difference between your output and input VAT. If output VAT is higher, you owe HMRC. If input VAT is higher, HMRC owes you a refund.
Any adjustments: This could include corrections for errors in previous returns, adjustments for fuel scale charges, or partial exemption calculations.

Your MTD-compatible software should help you compile this information directly from your digital records.

Submitting Your VAT Return

Submitting your VAT return is a straightforward process once your records are in order and your software is set up.

Review your figures: Before submission, carefully check all the figures generated by your MTD software. Ensure they accurately reflect your business activity for the period. Discrepancies can lead to penalties or incorrect payments.
Authorise your software: Your MTD-compatible software will connect directly to HMRC's systems. You'll need to authorise it to submit returns on your behalf.
Submit the return: Once you're confident the figures are correct, you can submit the return through your software. You'll usually receive a confirmation from HMRC once it's successfully submitted.
Pay any VAT due: If your return shows VAT is due to HMRC, you must ensure payment reaches them by the deadline. You can pay via Direct Debit, BACS, or Faster Payments.

Deadlines

Your VAT return and payment are typically due one calendar month and seven days after the end of your VAT accounting period. For example, if your VAT period ends on 31 March, your return and payment are due by 7 May. These deadlines are strict, and late submissions or payments can incur penalties.

Common mistakes

Incorrect record-keeping: Not keeping accurate, digital records can lead to errors in your return and potential penalties.
Missing the deadline: Submitting your return or paying your VAT late can result in surcharges and penalties from HMRC.
Not using MTD-compatible software: All VAT-registered businesses must now use MTD-compatible software for record-keeping and submissions.
Claiming incorrect input VAT: Only VAT on goods and services used for your business can be reclaimed. Personal expenses or non-allowable items should not be included.
Ignoring discrepancies: If your software flags an issue or you notice a significant change from previous returns, investigate it before submitting.

Frequently asked questions

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