How to file an online VAT return with HMRC

by Vidit Agarwal Marketing Director

Each quarter, a Value added tax (VAT) return needs to be submitted to HM Revenue and Customs (HMRC) to provide information regarding input and output VAT. A VAT return comprises of the following:

· Total of sales and purchase during a quarter

· Amount of payable VAT

· Amount of VAT eligible for refund

Even if no VAT amount is due, a return needs to be filed with HMRC. Apart from the quarterly VAT returns, a final return needs to be submitted to HMRC comprising of information for the entire financial year. This can be easily done using the online VAT account. However, in case of bankruptcy, HMRC will send a paper version of the VAT return that needs to be completed. In order to submit an online VAT return, it is imperative to register for HMRC’s online service and enrol for online services applicable for VAT. To use the online services, a business can log into HMRC website and follow the instructions to access or edit the required details. (see right)

Submitting VAT return online

A user must submit VAT returns online except:

· When the business is under discussion of insolvency – If such a situation arises, a limited company can opt for a Company Voluntary Arrangement (CVA) through which it can pay back the creditors depending on the time period decided mutually. The company also has an option to continue trading if the creditors permit

· When the business opposes the use of computer (basis religious grounds)

· When online services can’t be accessed or used due to age, some disability or restricted internet access

Due to some other reasons if a business fails to submit the returns online, they can log contact HMRC VAT enquires helpline to get additional details regarding how to proceed further. Each business needs a VAT number and online account to submit the return online.

To use the online VAT services, a user needs to complete the online enrolment process once. Initially, when businesses register for the online VAT services, they are given a User ID and as a requisite need to generate a password. Upon completion of the enrolment process, businesses can set up an e-mail reminder regarding the next online VAT return. Once a user has registered for VAT services online, HMRC will automatically send activation PIN through postal service (this PIN should be used within 28 calendar days, post the date of issue). To register for online VAT services, following information must be kept handy:

· VAT registration number

· Primary business place postcode

· VAT registration date

· Previously filed VAT return

· Payable VAT amount

With the changes in the Flat Rate scheme, it is the choice of the business whether to opt for Flat Rate Scheme or shift to a Standard VAT Scheme. To arise at the best option for the business, it is recommended to speak to specialist accountants in Nottingham before taking a call.