VAT

Now that VAT has been in operation for three months the data has to be 'declared' and communicated to HMRC by making a VAT 'Return'.

The difference between VAT income (outputs) and VAT expenditure (inputs) has to be paid over if the former is greater than the latter.

Downloads required

VAT 100

VAT Details

Calculating the return

The book-keeping software should have a function for doing the calculation for you - sometimes known as VAT 100. Check the values are the same as the report provided, and take care to make sure the date range is correct.

Filing the transactions

Once the VAT is agreed, in most book-keeping software there is a way of tagging the transactions used in each VAT Return. This helps ensure that transactions are not declared twice, and older transactions that come to light after a return has been made are included in the next available return. Before you run this utility you should take a back-up of the data file.

Complete the return

All businesses must now file VAT Returns online. Log-in and navigate to the correct page, and then enter the data in the boxes 1-9. Boxes 2, 8 and 9 will be zero values.

Paying the amount due

In the filing process above, different software handles the VAT debtor or creditor differently, but will most likely create a balance on Accounts Receivable or Accounts Payable. If the balance is a liability (Accounts Payable), this amount will need to be paid to HMRC within a month of the end of the VAT quarter. There is a seven day extension to this timeframe if paying by bank transfer.