To avoid any unwanted surcharges from HMRC, you need to make sure you submit your VAT return correctly and on time. Here's a process to help you do just that. For further guidance on how to submit a VAT return, visit the .Gov website: https://www.gov.uk/vat-returns
This process features on our list of 25 processes every business needs.
1Reconcile bank transactions
Importance: Essential
Reconcile the bank balances in your accounting software to match exactly the balances on your bank statements.
Refer to your bank reconciliation task.
2Run an account transaction report
Importance: Optional
Accounting software > reports > account transactions > select the dates that pertain to the VAT period you want to file for
2.1Review VAT codes on transactions reconciled in VAT period
Importance: Optional
Check the VAT codes are correct on each line item for the VAT period, adjust if incorrect.
Have you applied the correct VAT percentages on your invoices, expenses etc?
gov.uk/guidance/rates-of-vat-on-different-goods-and-services
Standard - 20% - Most goods and services
Reduced rate - 5% - Some goods and services, eg children’s car seats and home energy
Zero rate - 0% - Zero-rated goods and services, eg most food and children’s clothes
3Draft VAT return
Importance: Essential
Accounting software > accounting > VAT return > select the dates that pertain to the VAT period you want to file for
3.1Review VAT return
Importance: Essential
Check the totals in boxes 1-9 are what you expect is listed for the VAT period.
If you have applied the correct VAT percentages on your invoices, expenses etc you shouldn’t find any problems.
4Submit VAT return to HMRC
Importance: Essential
Once sure the VAT is correct, press submit to HMRC
5Pay VAT owed to HMRC (if applicable)
Importance: Optional
The amount to be paid is stated on the VAT return
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