If your business has a turnover of more than £85,000 when accounting for sales of non-VAT exempt goods and services, then you must be registered for VAT. This means you will need to charge clients VAT on all of those goods and services and then file your VAT returns with HMRC.
You can get help with your VAT returns by using our services – we can provide specialist help to ensure you are filing correctly for your business size, so that you are not overpaying.
When are VAT returns due?
Your VAT accounting period lasts for 12 months. Once this period has ended, you must file your VAT return within two months. Your VAT submission will include information of all sales that are not VAT-exempt, as well as any purchases your business has made that included VAT.
If you have ended up paying more in VAT than you owe to HMRC, you will be entitled to a VAT rebate.
How to pay VAT?
You cannot wait until you have filed your VAT return to start making payments. Instead, you must make advanced payments towards the VAT bill during your accounting period. You can choose to pay monthly or quarterly. Your VAT bill will be based on your prior records, or if it is the first year you are registered as a VAT business, an estimate based on your business size and other details you will provide to HMRC.
If you choose to pay monthly, you will be required to pay 10% of your estimated VAT bill at the end of months 4, 5, 6, 7, 8, 9, 10, 11 and 12, with the final payment coming when you file your return within 2 months of the end of your accounting period. Quarterly payments are 25% of your estimated bill, paid at the end of months 4, 7, 10 and then the final payment by the VAT return deadline. Again, if you have overpaid when you file your return, you will be due a rebate.
If you need help with your VAT annual accounting, we can manage the process completely on your behalf, or offer guidance. Our VAT accountant services can free up your time to focus on managing your business.