VAT Returns

When a company’s sales or turnover reaches a certain threshold, currently £85,000, it must register for VAT with HMRC, charge VAT on any sales it makes and submit a quarterly VAT return.

A VAT return is completed with information extracted from the company’s bookkeeping system. This includes the total sales made by the company broken down into the net figure and the VAT element (the output VAT) and the total purchases made by the company, again broken down into a net figure and the VAT element (the input VAT)

Subtracting the input VAT from the output VAT will result in a sum that is due to be paid by the company to HMRC. However, if the input VAT is higher than the output VAT then the company will be due a refund from HMRC.

Companies can file their quarterly VAT returns online via the HMRC VAT website or they may use the services of an accountant to prepare a VAT return every three months.

Alternatively, 121 Company Formation is an experienced accounting company that specialises in offering sound business advice to start-up, small and medium sized companies, assists them in running their operations in the most tax efficient way and prepares their VAT returns for submission to HMRC.

When are VAT returns due to be filed?

Although there are five different accounting schemes, the due date is the same for each – one month and seven days following the end of the three month accounting period, i.e. the return for April, May and June must be filed by 6th August

121 Company Formation will be able to advise you which is the best VAT scheme for your company from:

  •   Standard VAT accounting
  •   Annual VAT accounting
  •   Flat rate VAT
  •   Flat accounting
  •   VAT margin

VAT Assessments

If a company fails to file a VAT return on time then HMRC will automatically send an assessment of what it calculates you are likely to owe based on previous returns and demand that the VAT due is paid immediately.

If you do receive an assessment, we would advise that you complete and file the outstanding VAT return immediately together with any VAT payment that is due since the assessment may either be too high or too low.

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