Can I do a VAT return online?

You may have just crossed the threshold for VAT registration or you're planning to for a voluntary registration of your business and are wondering what the registration process with value-added tax can mean for your company.

Although this will require a little more documentation (which Ember will handle for you), it also means that you can claim the VAT you've incurred from any manufacturer or supplier that is VAT-registered. To claim this tax rebate, you'll have to make VAT returns regularly.

In this post, we'll go through the process of  Filing VAT returns online, the information in the return, and what you should do should you make mistakes in your return.

Can I do a VAT return online?

You can not only submit your taxes online but also under Making Tax Digital for VAT (MTD for VAT) you must file an online VAT form through government gateway accounts Government Gateway account is compulsory in addition to filing an unofficial paper return and not confirming that you're exempt, you could face with a penalty of as high as £400.

If you've registered your business to be VAT registered, you'll have registered a Government Gateway user ID and will be issued a tax registration code. Armed with these, you'll be able to submit your VAT return online.

There are two methods to achieve this: either recording VAT data in spreadsheets, and then converting them into MTD-compatible information using software for bridging, or selecting an all-in-one financial software that will file your tax return directly to HM Revenue and Customs (HMRC) for you.

What is a VAT return?

A VAT tax return (HTML0) is a type of form which shows how much VAT you owe or are due from HMRC.

As soon as HMRC accepts your VAT registration application you'll need to add the correct amount of VAT on the products and services you offer to your clients. With MTD you'll require MTD-compatible software to save your VAT data in digital format using digital links. These will directly file your VAT registration to HMRC for you.

What's included in the VAT return?

The VAT return you file should include:

You all-time purchases in addition to purchases over a three-month accounting period. The total amount VAT you have to pay for purchases sum in VAT you can claim for purchases that your company makes

When will my VAT return be due?

HMRC mandates that you submit your VAT return at least every three years at the close of each financial period, even if there's no VAT due or due back owing. If you are enrolled in a VAT scheme and need to file returns, submission dates vary according to which scheme you belong to; we've included more information below about each scheme but you will find your exact filing and payment dates by using an online bank account.

Filing and paying your tax return within one calendar month and seven days following the end of VAT time are the deadlines for filing and making payments to HMRC, respectively. Be sure to leave enough time for cash to reach their account (more information on this in our guide on paying VAT invoice).

VAT Schemes

Are You Struggling to Keep Up With Your VAT Obligations? If that is the case for you, perhaps registering for one of the VAT schemes might help ease the strain on cash flow without impacting their finances too much. These programs offer assistance for VAT-registered entrepreneurs in paying their tax bills without impacting cash flow significantly.

Under the VAT Flat-Rate Scheme, VAT-registered business owners pay a set percentage of annual revenue to pay their VAT invoice, deducting any discrepancies between what customers are charged for VAT and what they owe HMRC. If your business is struggling to stay the top of the cash flows of your business, then you may consider the VAT Flat Rate Scheme beneficial as it allows you to VAT that is charged in this program is lower than the standard 20% amount of VAT. But, you won't be able to claim back the VAT you pay for purchases made from suppliers. You can sign up for the scheme on your own when you first register your company to be VAT registered. To join, you need to meet the following requirements:

If you're a VAT-registered business, you can expect your VAT-taxable revenue of at least £150,000 excluding VAT within the next 12 months.

TVA cash accounting Scheme

To determine the amount of VAT you're liable for You'll usually need to calculate the difference between sales invoices and purchase invoices - even if invoices you've sent to clients are waiting to be paid. Under the Cash Accounting Scheme, things are a bit different. You can:

You must pay VAT on sales if your customers pay you. Reclaim VAT on purchases once they have paid you to your vendor

Additionally, you don't have to report your input or out-tax on your tax return until your customers have repaid you and you've paid your suppliers.

Tax Annual Accounting Scheme

In the Annual Accounting Scheme, you only submit one VAT return per year instead of the standard 4. This doesn't mean that you'll receive an enormous tax bill after the year, with this scheme, you can pay off the tax in quarterly or monthly instalments. A couple of other benefits of the scheme are:

Additional payments are possible in the future if you can pay for them. Doing this once per year will free up time to concentrate on your business. You have two months instead of just one to file your balance payment and tax return. You can make your accounts more efficient at the end of the year by synchronising your VAT year with the tax year of your business.

In the program, HMRC calculates your owed amount on the previous VAT returns or a rough estimate of first-timer to VAT. After they've determined the amount you owe, they'll send you a notice outlining your VAT due dates, and what the cost of each instalment will be. After filing your VAT tax return after the year if you've paid more than the amount due Tax authorities will offer you a refund of VAT in a matter of 10 working days. To participate in the program, tax-deductible sales for the following twelve months must be lower than PS1.35m not including VAT.

What happens if I make mistakes in my tax return?

This is where double-checking your return before filing is crucial. Any mistakes that you do not declare on your tax return can cause you to pay the equivalent of 15 per cent of the tax amount. If you do make a mistake, however, if you're careless or have deliberate mistakes it can lead to the possibility of a fine of the amount of 100 per cent of any tax not stated or claimed too much. Ouch. To minimise the chance that you'll be fined, timing is crucial. If you spot the error after you've filed your tax return, you can correct the mistake and take explicit note of the error and how you've corrected it.

Be aware that if you're an owner of a VAT-registered business it is mandatory to file an annual VAT return, even if you aren't required to pay or get back any VAT except, of course, your business is VAT exempt.