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Since April 2010 most VAT-registered businesses have been required to submit their VAT Returns online and pay any VAT due electronically. HM Revenue & Customs (HMRC) plans, from 1 April 2012, to extend this requirement to all VAT-registered businesses, apart from a very small number who will be exempt.
This guide explains what action you need to take to start submitting your VAT Returns online. It also tells you where you can get more information and advice.
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From 1 April 2010, you must submit your VAT Returns online and pay any VAT due electronically if either of the following applies:
In the case of the first group, you must continue to submit all your VAT Returns online (including nil and repayment returns) even if your turnover drops below £100,000 in the future.
From 1 April 2012, all remaining VAT-registered businesses - those registered for VAT before 1 April 2010 with a VAT-exclusive turnover of less than £100,000 - will also have to submit VAT Returns online and pay any VAT due electronically
If you are still submitting VAT Returns on paper, HMRC strongly recommends you sign up to using the online service before April 2012, so that you have time to get familiar with the new service. Using the online service is quick and easy, and in most cases gives you extra time to submit your return and pay any VAT due.
If you need help in submitting your VAT Return online, see the section later in this guide on help and support.
Find out how to sign up to use the VAT online services
The VAT Online filing service has a number of useful features that you need to be aware of, to get the best from the service:
The first step to submitting your VAT Return online is to sign up for VAT online services. You need to do this whether you choose to use commercial software or HMRC's free online service. Alternatively, you can use an accountant or agent to submit your returns online, in which case your agent will need to sign up for VAT online services on your behalf.
Find out how to sign up to use the VAT online services
Read more about how to submit your VAT Return online
Read more about using an accountant to submit your returns online.
When you submit your VAT Returns online, you must also pay any VAT due electronically. Paying electronically will normally give you to up to seven extra calendar days to submit your return and pay your VAT, unless you make annual returns or payments on account. The extended due date will be shown on your online return and you must ensure that cleared funds reach HMRC's bank account by this date. If your payment clears later than this, you may be liable to a surcharge for late payment.
There are various ways to pay including by Direct Debit, online and telephone banking. You can also pay by cheque at a bank or building society using a Bank Giro paying-in slip which can be obtained from HMRC. Since some of these methods can take a little time to set up, you should choose which method you want to use, and set it up, well in advance of the filing and payment deadline.
Find out about the different ways to pay your VAT electronically
You may not have to submit your VAT Return online or pay your VAT electronically if either of the following applies:
If you feel that either of these criteria applies to your business, you should write to:
HMRC VAT Mandation Review Team,
Crownhill Court,
Tailyour Road,
Crownhill,
Plymouth,
Devon
PL6 5BZ
You should explain in your letter which exemption you think applies to you, and provide any information and/or supporting documentation that you think is relevant.
You can get help with using HMRC's VAT online services in the following guides, which can be printed off.
Beginner's guide to signing up to use the VAT Online service (PDF 106K)
Beginner's guide to completing your VAT Return online (PDF 85K)
There is also an online demonstrator, which takes you through the process of signing up for VAT Online, submitting a return, and setting up an online Direct Debit.
View the online demonstrator - Introduction to VAT
HMRC's Business Education & Support Team offers free workshops and Business Advice Open Day events designed especially for small- and medium-sized businesses. Events will show you how to sign up to the VAT Online service, the key features of the website and provide information about paying electronically.
