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5 Min. Read

How to Submit Your VAT Return Online

How to Submit Your VAT Return Online

You have to submit your UK Value Added Tax (VAT) returns to HMRC online, under the Making Tax Digital policy. There are rules to follow and penalties if you don't. But you already know everything you need to. You're just presenting it digitally. And FreshBooks knows exactly how to do that for you. Here's how...

Here’s What We’ll Cover:

What is a VAT Return?

How to Submit HMRC VAT Returns Online

8 Easy Steps to Submit a VAT Return Online

Key Takeaway

Online VAT Return FAQs

What is a VAT Return?

VAT returns are how VAT-registered companies must report 2 crucial pieces of information to HMRC:

  • VAT you charge your customers
  • VAT you pay on goods and services for your business

HMRC calculates the difference between VAT collected and paid. This becomes either your VAT bill or VAT rebate amount.

You must send these online forms to HMRC every 3 months using the correct accounting software - even if you don't owe any VAT, or have any VAT to reclaim.

And you're also required to keep digital VAT records which are the evidence of your total sales and costs, VAT owed to HMRC, and VAT you're entitled to reclaim.

Handy tip: From April 2022, these Making Tax Digital VAT regulations will apply to all VAT-registered companies, not just those that are over the VAT threshold.

If you want to know more details about your VAT position, have a quick read of FreshBooks' 'How Does VAT Work in the UK?' article.

How to Submit HMRC VAT Returns Online

If you're newly VAT-registered, you'll need to set up your Making Tax Digital online VAT account with HMRC through your Government Gateway account. And connect it to your FreshBooks account.

Already completed your VAT registration? If you've got FreshBooks, you're already collecting the required Making Tax Digital for VAT records. And we're completely compatible with HMRC's portal. So you're all ready to submit your VAT return at the end of each quarter with the minimum of time and effort.

8 Easy Steps to Submit a VAT Return Online

The simplest way to submit an online VAT return is to use FreshBooks Accounting Software. FreshBooks helps you send your VAT returns straight to HMRC in just 8 steps:

  1. Go to the Integrations section of your FreshBooks Account
  2. Click on 1ClickMTD
  3. Hit the Start a Submission button
  4. Select a Period from the ‘Period to File’ dropdown menu
  5. Check the numbers are correct on your VAT Return Report
  6. Fix any discrepancies in your FreshBooks account
  7. Tick the legal declaration box. This says 'I confirm that this VAT period is finalised and includes all relevant transactions'.
  8. Click Submit

You'll get a comforting on screen confirmation of its successful submission to HMRC.

FreshBooks files your most recent VAT return in the Past Submissions section, under Actions. From here, you can print your VAT return as a PDF, if you want a paper copy.

We've got a quick guide ready for you to make paying your UK VAT bill slightly less painful.

Key Takeaway

The less time you spend worrying about and doing your accounts, the more time you've got for your clients. So let's keep tax times short, simple and stress free.

Automate your important VAT admin with trusted, secure FreshBooks software. It literally does it for you - you just have to click on the right bits at the right time. And if something doesn't seem right, give us a call and we'll sort it out together.

Online VAT Return FAQs

What Date Is My VAT Return Due?

There isn't one VAT return deadline for everyone, like the January self-assessment tax return deadline.  Because your VAT cycle is based on your company's quarterly accounting periods, everyone's due date is different.

Your VAT return is due one month and 7 days after the end of an accounting period, that's every 3 months.

You can check your personal VAT return deadline in your VAT online account. It tells you when you must submit your VAT return and when your VAT payment must clear into HMRC's account.

What Happens If I Submit My VAT Return Late?

If you submit your VAT return after your deadline, HMRC records a 'default'. There is no fine for one default in a 12 month period.

But if you default again in the same year, you will be penalised with a surcharge. There are 2 different fine structures, depending on whether your annual turnover is under or over £150,000.

As HMRC explains:"Your surcharge is a percentage of the VAT outstanding on the due date for the accounting period that is in default."

Under £150,000:

  • 2 defaults: no surcharge
  • 3 defaults: 2% (0% if less than £400)
  • 4 defaults: 5% (0% if less than £400)
  • 5 defaults: 10% or £30 (the higher figure)
  • 6+defaults: 15% or £30 (the higher figure)

Over £150,000:

  • 2 defaults: no surcharge if less than £400
  • 3 defaults: 5% (none, if under £400)
  • 4 defaults: 10% or £30, whichever is bigger number
  • 5 defaults: 15% or £30, the higher number
  • 6+defaults: 15% or £30, the higher number

HMRC also charges further penalties for "careless or deliberate" mistakes on your VAT return, not telling HMRC their calculation is wrong within 30 days, and if you submit a paper VAT return without previously organising an exemption from online filing.

How Often Do You Do a VAT Return?

Most businesses must send a VAT return every three months at the end of their accounting period.

If your company pays over £2.3million VAT per year, you must pay monthly VAT 'payments on account' and can submit monthly VAT returns. You can make this change through your online VAT account, or using form VAT484.


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