Who can submit a VAT Return?

Most VAT-registered businesses must submit VAT Returns using Making Tax Digital (MTD)-compatible software.

The software is used to maintain digital VAT records, prepare the VAT Return and file it directly with HMRC.

Some businesses may qualify for an exemption from MTD requirements, for example where:

• it is not reasonably practical to use digital tools because of age, disability or location
• the use of electronic communications is incompatible with religious beliefs
• other exceptional circumstances apply and HMRC has agreed an exemption.

Before submitting a VAT Return, check that:

• all sales and purchases for the VAT period have been recorded
• any VAT adjustments have been included
• the figures shown on the VAT Return appear reasonable.

Most accounting software will provide confirmation that the VAT Return has been successfully submitted. You should retain any submission confirmations and supporting records as part of your VAT records.

Many businesses choose to have their VAT Returns prepared or submitted by an accountant, bookkeeper or tax agent.

Before an agent can act on your behalf, HMRC will normally require authorisation. The exact process depends on the services being provided and whether the business is registered for Making Tax Digital (MTD).

Once authorised, an agent may be able to:

• prepare VAT Returns
• review VAT records
• submit VAT Returns to HMRC
• communicate with HMRC about VAT matters on your behalf.

Even if an accountant or tax agent submits the VAT Return, the business remains responsible for ensuring that the information provided is complete and accurate.

Before authorising an agent, make sure you understand who is responsible for reviewing the figures and approving the VAT Return before submission.

Your VAT filing dates are determined by HMRC and will depend on factors such as your VAT registration and the VAT accounting scheme you use.

VAT-registered businesses on the standard scheme submit VAT Returns quarterly, although if your business is on a special scheme, such as the Annual Accounting Scheme, filing frequencies and deadlines will be different.

On the standard scheme, the deadline for filing a VAT Return and paying any VAT due is one calendar month and seven days after the end of the VAT period.

You can usually find your VAT Return deadlines in:

• your MTD-compatible accounting software
• your HMRC online account
• correspondence from HMRC.

Before filing your VAT Return, make sure you leave enough time to review the figures, investigate any unusual transactions and arrange payment if VAT is due.

Remember that the business is responsible for ensuring that VAT Returns are submitted and payments are received by HMRC on time, even if an accountant or tax agent submits the return on your behalf.

If you do not submit your VAT Return by the filing deadline, HMRC may apply a late submission penalty under its VAT penalty points system.

Under this system, businesses receive a penalty point each time a VAT Return is submitted late. Once a points threshold is reached, HMRC may charge a financial penalty. Additional penalties can apply for further late submissions while the threshold remains in place.

If you do not pay VAT by the due date, HMRC may also charge:

• late payment penalties
• interest on the outstanding VAT.

If you realise that a VAT Return will be late, it is usually best to submit it as soon as possible, even if you cannot pay the full amount immediately. This may help limit additional penalties and interest.

Where HMRC does not receive a VAT Return, it may estimate the VAT due based on the information available and take action to recover the amount owed. If this happens, you should submit the outstanding VAT Return as soon as possible so that the correct VAT liability can be established.

Before your VAT Return is filed, it should be checked to ensure that all relevant transactions for the VAT period have been recorded correctly.

A VAT Return will normally include:

• VAT due on sales and other outputs
• VAT reclaimed on qualifying purchases and expenses
• the total value of sales
• the total value of purchases
• any VAT adjustments that apply to the period.

Although MTD-compatible software will usually calculate the VAT Return automatically, the figures should still be reviewed to ensure they are complete and reasonable.

Invoices and receipts are not submitted with your VAT Return. However, you must keep appropriate records and supporting evidence in case HMRC asks to see them.

Finally, you should be aware that a VAT Return must normally be submitted even if:

• no VAT is payable;
• no VAT is reclaimable; or
• there have been no transactions during the VAT period.

These are often referred to as nil VAT Returns.