Completing and submitting a VAT return
In this section:
How to complete and file a VAT return
At the end of each VAT period - usually every three months - you need to fill in a VAT return. A VAT return tells HM Revenue & Customs (HMRC) how much VAT you charged to your customers, how much VAT you paid to your suppliers - and the amount of VAT you must pay to HMRC or the amount of VAT you can reclaim from HMRC.
VAT returns are currently available in paper and online formats but HMRC plans to phase out paper VAT returns from 2010. From then, if your turnover is over £100,000 - or if you are newly VAT registered - you will have to file your VAT return online and pay VAT electronically.
This guide explains in detail how to fill in your VAT return and points you to how to register to file your VAT return online.On this page:
- What a VAT return is for
- How often do I need to file a VAT return?
- If you are filling in a VAT return for the first time
- How to fill in your VAT return
- The end of paper VAT returns
- More useful links
What a VAT return is for
You use a VAT return to tell HMRC about:
- the VAT you have charged to your customers - known as output tax
- the VAT you have paid on your purchases - known as input tax
If your output tax is more than your input tax, you must pay HMRC the difference. If your output tax is less than your input tax, you reclaim the difference from HMRC.
The standard way to account for VAT is to include all invoices you have issued and received during your VAT period, along with any cash or credit card sales or payments. There are other ways of accounting for VAT if you use one of thee VAT accounting schemes such as:
- cash accounting: you account for VAT based on payments you make and receive
- flat rate accounting: you pay a fixed percentage of VAT based on your turnover
Get information about the different VAT accounting schemes
VAT returns are currently in both electronic and paper form, but paper returns are being phased out. Read the section in this guide about the end of paper VAT returns.
Find out more about how to charge and reclaim VAT
Find out how to adjust your VAT payments or claims
How often do I need to file a VAT return?
You need to fill in and submit a return for each VAT period, which is usually every three months. Sometimes a VAT period can be yearly or monthly.
If you use the annual accounting scheme, you only need to file one VAT return each year - but you will need to make interim VAT payments on account.
You can ask HMRC for a monthly tax period if you expect to regularly reclaim VAT because the VAT you pay on your purchases is usually more than the VAT you charge on your sales. You will have to make 12 VAT returns per year. You can't use monthly VAT periods if your turnover is below the VAT threshold and you registered voluntarily for VAT.
You must file a VAT return even if you don't buy or sell anything VATable during your VAT period.
Find out about voluntary VAT registration
Get information about the VAT annual accounting scheme
Get information about how to pay VAT
If you are filling in a VAT return for the first time
If you have just registered for VAT, on your first VAT return you can reclaim VAT on certain goods and services you bought before you registered.
Find out more about reclaiming VAT on purchases you made before you were VAT registered
How to fill in your VAT return
Before you begin
Here's how to fill in negative amounts and not applicable boxes. You must not leave any box blank.
Electronic VAT return:
- Negative amount: put a minus sign before the figure
- None or not applicable: put '0.00'
Paper VAT return:
- Negative amount: put the figure in brackets ( )
- None or not applicable: put 'NONE'
You should read the notes on the return and, if necessary, the more
detailed guidance in VAT Notice 700/12.
More
about filling in your VAT return in VAT Notice 700/12.
Box 1: VAT due on sales and other outputs
This is the total amount of VAT that you charged on sales to customers. You must also include other supplies made such as sales to staff (eg canteen meals), sales of business assets, goods that you give away (if it cost you more than £50) and goods that you take out of the business for your own use. Deduct from this total any credit notes you have issued or debit notes you have received.
Find out about when to charge VAT
Find more information about VAT and credit and debit notes
Box 2: VAT due from you (but not paid) on acquisitions from other EU countries
You need to calculate the VAT due on goods and directly related services that you buy from other European Union (EU) countries. You may also be entitled to reclaim this amount - to do that, include the figure within your total at box 4.
Get information about VAT and international trade
Box 3: total VAT due
This is the sum of boxes 1 and 2. This is the amount of VAT you must pay to HMRC (output tax). This is calculated automatically when you complete your VAT return online.
Box 4: VAT reclaimable on your purchases
This is the VAT that you paid on your purchases. You should also include VAT you paid on imports, on goods you removed from a bonded warehouse or free zone, and acquisitions of physical goods or services directly related to those goods you acquire from other EU countries - ie the figure you put in box 2. Deduct from this total VAT on any credit notes you have received or debit notes you have issued. This is the amount of VAT reclaimable from HMRC (input tax).
Find more information about VAT and credit and debit notes
Find out about VAT and international trade
Box 5: VAT payable or reclaimable
This is the difference between boxes 3 and 4. This is calculated automatically when you complete your VAT return online.
If the amount in box 3 is greater than box 4, you pay this amount to HMRC.
If the amount in box 3 is less than box 4, you reclaim this amount from HMRC.
Box 6: your total sales excluding VAT
Show your total VAT exclusive sales ('outputs') on which you charged the VAT that you put in box 1. You should also include any zero-rated and exempt supplies and any amount you put in box 8. Subtract the net amounts of any credit notes that you issued or debit notes you received. Don't include any items outside the scope of VAT.
Find information about VAT rates and items that are exempt from VAT or outside the scope of VAT
Box 7: your total purchases excluding VAT
Show your total VAT exclusive purchases ('inputs') on which you paid the VAT that you put in box 4. You should also include any amount you put in box 9. Don't include expenses such as salaries and taxes or anything that is outside the scope of VAT such as vehicle licences, MOT certificates and local authority rates.
Boxes 8 and 9
You only need to fill in boxes 8 and 9 if you have supplied or 'acquired' physical goods - or services directly related to those goods such as freight or insurance charges - to or from another EU country.
Find out about VAT and international trade
Box 8: the total value of goods and services that you supplied to other EU countries
Show the total value of goods and related services that you supplied to another EU country, even if there was no actual sale, or if the goods were invoiced to a person or organisation outside the EU. You include this amount in your box 6 total.
Box 9: the total value of goods and services that you acquired from other EU countries
Show the total value of goods and related services that you received from another EU country, even if there was no actual purchase, or if the goods were invoiced to a person or organisation outside the EU. You include this amount in your box 7 total.
Make adjustments for errors in previous VAT returns
If you find that you made a mistake on a previous VAT return, you may be able to make an adjustment on your next VAT return, or you may need to contact us and tell us about the mistake immediately. Which method you use depends on the size of the error.
Find out which method you should use to correct mistakes on previous VAT returns
Filling in a VAT return for the last time?
Find out what to do if you close your business or want to de-register for VAT
If you have been involved in any ‘reverse charge’ transactions, you will also need to complete a Reverse Charge Sales List.
More on how to file your Reverse Charge Sales List
Where to send your paper VAT return
If you have mislaid the envelope that came with your VAT return, then please post your VAT return to the following address:
The Controller
HM Revenue & Customs VAT Central Unit
Alexander House
21 Victoria Avenue
Southend-on-Sea
SS9 1AT
The end of paper VAT returns
You can still receive a paper VAT return in the post to complete and
post it back to HMRC. HMRC plans to phase out paper VAT returns from
April 2010. From then, if your turnover is over £100,000 - or
if you are newly VAT registered - you will have to file your VAT return
online and pay VAT electronically.
You are therefore advised to register to file your VAT returns online
as soon as possible.
Register for VAT online using HMRC online services
More about the benefits of filing your VAT return online and how to set up an online account
More useful links
View the VAT online demonstration
More about how to fill in your VAT return in VAT Notice 700/12
Find out what to do if you've made a mistake in a previous VAT return
