VAT Returns
Doing Your First VAT Return
Contact me if you need help to do your VAT Return; especially if it’s your first VAT Return.
In your first VAT Return you have the opportunity to claim back VAT paid on your previous six months of services, and very importantly four years of capital expenditure such as vehicles, machinery, tools, plant equipment, office equipment, etc. As long as it’s still in use for your business, you can claim back the VAT that you originally paid.
VAT Threshold
You should register for VAT as soon as your business goes above the £90k threshold. HMRC will ALWAYS backdate to the point where you should have registered. So, the longer you delay, the more you will owe.
It would not be acceptable to HMRC for you to reach the end of your tax year in March (for example), get your year end accounts done and then realise that you should have registered for VAT in the previous October. In such cases HMRC will simply make a determination (a claim) for 16.67% of your total sales going back to October.
If you haven’t charged VAT for the missing six months you’re in trouble. That’s why it very important to monitor your sales figures on a month by month basis. If you get anywhere close to the VAT threshold you need to take action.
Advice on Whether or Not to Register
Depending upon what goods or services you sell, and who your customers are, being VAT registered may be an advantage or a disadvantage.
Please see my article ‘ Do I need to register for VAT ‘ on the Clients Page.
VAT Return Software and Procedures
All VAT Returns must now be made by uploading data directly to HMRC. This can only be done by software that is able to communicate directly with HMRC’s servers. This is part of HMRC’s ‘Making Tax Digital’ initiative.
Almost all accounting software packages, such as Sage, Xero, QuickBooks, FreeAgent etc. are able to do this, but it can also be done by some very simple ‘Bridging Software’ that still allows you to put in your own figures and make a VAT Return.
Follow this link to visit the HMRC page about when you need to register:-