A VAT return is a tax form you file to show how much VAT you are due to pay HMRC. Your VAT return should contain your total sales and purchases for the period, the amount of VAT you owe and the amount you can reclaim, and what your VAT refund is.

You’ll have to submit a VAT refund even if you don’t have any VAT to pay or reclaim.

Calculating VAT

In a nutshell: the VAT return calculates the amount of VAT due on sales (called your output VAT), minus the amount of VAT you can reclaim on purchases (called your input VAT).

The resulting figure is the amount you pay. If the amount you reclaim is higher than the amount due, then you’ll get a VAT refund.

How to do VAT returns

The rules and regulations surrounding VAT returns can be quite complicated. For a full overview, you can read the government’s VAT Guide.

The essentials that you need to be aware about are:

There are different rates of VAT, including standard (20%), reduced (5%) and zero rate (0%)
You can’t always reclaim VAT on purchases, for example for client entertaining, car purchase, or non-business use

There are severe penalties for errors, including penalties of 15% for undeclared errors.

Let us take the headache out of VAT submissions and contact us for a free consultation on 02920 641 098