Most businesses in the UK will need to submit VAT returns and payments every three months, with strict deadlines for these submissions set in place by HM Revenue & Customs (HMRC).
The deadline for VAT returns and payments due for the accounting period ending 30 April 2023 is fast approaching, with submissions due no later than 7 June 2023.
What to include in a VAT return
Although VAT returns are standard procedure, it is essential that you cover your bases. HMRC is likely to charge you a penalty of up to 100 per cent of any inaccurate submissions.
A VAT return should include:
- Your company’s totals sales and purchases for the quarter
- The amount of VAT you owe
- The amount of VAT you can reclaim
- Any VAT refund you are owed from HMRC
How to submit a VAT return
VAT returns can only be submitted electronically unless you object to using computers on religious grounds, you have a disability or are too old to use a computer. In these scenarios, paper submissions are permitted.
All VAT-registered businesses should be signed up for Making Tax Digital (MTD) for VAT, and as such should have compatible MTD software in place to file their VAT returns.
If you do not have the compatible MTD software available, an alternative method is to use bridging software which is a small tool used to link your business and HMRC.
This software does not keep digital records, however, so it is advised that this tool is used in the short term while you find adequate MTD software.
How to pay
HMRC requires all VAT payments to be made electronically, with various methods of doing this.
It can be paid online through your internet banking account or app, or by debit or corporate credit card, both of which will be paid the same or next day. The same is true if you use Faster Payments or a CHAPS transfer.
If you choose to pay online, you’ll need your nine-digit VAT registration number.
It can also be paid via Direct Debit, a standing order, or using a Bacs bank transfer. These methods of payment will take three working days to process.
Penalties for late payments and returns
For every late submission, your business will receive a penalty point.
For businesses submitting on a quarterly basis, the threshold for penalty points is four. If you go over this threshold, HMRC will issue you with a £200 penalty.
These late submissions do not apply if this is your first or final VAT return, or if it is a one-off return that covers a period other than a month, quarter, or year.
Submitting VAT returns and payments can be a straightforward process, but attention to detail is key to avoiding any penalties from HMRC.
Remember to get your submissions in for the 7 June deadline.
If you’d like any more advice on VAT returns and payments, please contact us today.