What you need to know to submit your online VAT Return


If you’re a business owner, you will almost certainly be required to file a VAT return every three months. The good news is that there’s never been less hassle or admin you need to deal with to file a tax return. In this article you can find out about everything you need to know about submitting and Pay VAT online.

What is the definition of a VAT Return?

Essentially, VAT is a tax levied on the purchase price of certain goods, services, and other supplies. You will see a standard VAT rate for most goods at 20%, while some items will only have a 5% or even 0% rate.

Every three months you will need to file an online VAT return with Her Majesty’s Revenue and Customs (HMRC). This return will outline your income and expenses during the time period in question. It will also show any VAT that you may need to pay or reclaim.

To submit a VAT Return, you must first register a profile on the UK government website. You will create a Government Gateway user ID and then register for a tax return profile with HMRC. Companies and organisations need to use a device or an authenticator app to login. Once all the details have been sorted, you can begin the process of filing your VAT return online.

The Making Tax Digital initiative

From 1 April 2019, all VAT-registered businesses with taxable turnovers greater than the current VAT registration threshold (£85,000) must submit their VAT Returns online or through an app. If you have registered for Making Tax Digital (MTD), your business will no longer be able to file a VAT Return through their online account. Instead, they are required to use MTD-compliant accounting software. The advantage of this is that it makes keeping and submitting records much easier, whether through an app or by submitting your VAT return directly from any Excel spreadsheet.

Completing your VAT return online

To complete a VAT Return, you must fill in several sections of the online form. Essentially there are 9 boxes required to have information. Some of these have changed recently due to the impact of Brexit. 

Box 1 will have the VAT due from sales and other outputs during the return period. Box 2 must have the VAT owed on purchases made in Northern Ireland from European Union member states. A sum of the first two boxes will be in Box 3, which is the total VAT owed. Box 4 must have the VAT reclaimed on purchases and other inputs (including EU purchases). Box 5 is for the net VAT to pay or reclaim to HMRC. In Box 6, there is the total sales and other outputs, excluding VAT, while Box 7 is the total cost of all purchases and other inputs, excluding VAT. Box 8 has been affected by Brexit and will so contain either:

  1. All goods and related costs supplied to EU Member States on or before December 31, 2020, excluding any VAT,
  2. Beginning on January 1, 2021, supplies of goods and related costs made from Northern Ireland to EU Member States, excluding any VAT.

Finally, Box 9 will have the purchases of goods and related costs from EU Member States to Northern Ireland, excluding any VAT.

These fields or required information can be changed or altered if you are using one of the special VAT VAT accounting schemes, such as the Flat Rate VAT Scheme. 

What happens if I submit a late VAT Return?

You don’t need to be concerned if you have only missed one VAT return deadline in a year. HMRC will record a “default” against your profile but will take no further action if you pay any owed VAT on time. 

You will be charged a penalty surcharge if you default again. The fine is calculated based on whether your annual turnover is greater than or less than £150,000. This is based on the percentage of VAT that was not paid by the VAT Return’s due date. 

You could also be punished for any inadvertent or intentional mistakes on your VAT Return, a failure to notify HMRC that their calculation is incorrect within 30 days.