VAT Returns

VAT Returns

You need to register for VAT if you go over or expect to go over the VAT threshold which is currently £85,000 in a rolling 12 month period.

A VAT Return is a form you fill in to tell HMRC how much VAT you’ve charged your customers and how much you’ve paid to other businesses. You usually need to send a VAT Return to HMRC every 3 months unless you have opted for monthly VAT returns.

The deadline for submitting your return online is usually one calendar month and 7 days after the end of an accounting period. This is also the deadline for paying HMRC.

Making Tax Digital (MTD) means you are no longer able to keep and submit manual VAT Returns. Instead, HMRC will only accept VAT returns sent using software that supports MTD for VAT.

VAT margin schemes

A VAT margin scheme lets you calculate VAT on the value you add to the goods you sell rather than on the full selling price of each item.

The VAT margin scheme reduces the VAT you pay if you’re selling:

You can only use the scheme if you were not able to claim back any VAT when you bought the goods.

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VAT Annual Accounting Scheme

You can use the VAT Annual Accounting Scheme if your annual VAT taxable turnover is £1.35 million or less.

It lets you complete one VAT return each year instead of 4 (one every 3 months).

You pay instalments of the VAT that you expect to owe, so that you do not get a large VAT bill at the end of the year.

You can also make extra payments towards your end of year VAT bill.

VAT Cash Accounting Scheme

You can use the VAT Cash Accounting Scheme if your annual VAT taxable turnover is £1.35 million or less.

It means you pay VAT to HMRC when your customer pays you rather than when you invoice them.

You can only reclaim VAT on your purchases after you have paid your supplier.

VAT Flat Rate Scheme

The VAT Flat Rate Scheme lets you work out what you owe HMRC in VAT as a percentage of your gross turnover.

You can only use this scheme if you’re a small business with an annual taxable turnover of £150,000 or less excluding VAT.

The amount of VAT you pay depends on your industry and type of business.

If you join this scheme, you:

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