VAT Returns

Ever-changing regulations and the growing demands of HMRC mean VAT compliance can be a complex administrative process. EKG Accounting can handle the registration process for you and calculate and complete the returns to ensure you claim back all the VAT you are entitled to.

VAT stands for Value Added Tax and is added to prices in the UK. VAT plays an important role for a business and can be charged on a range of your goods and services. Taxable areas of the business include sales of your goods and/or services, the hire of your goods, the sale of business assets, etc. VAT is a tax which is ultimately paid by the consumer. While businesses pay VAT to Her Majesty’s Revenue and Customs (HMRC), the actual cost has already been paid by the customer, covered by the purchase price of goods or services bought. As such, it is an indirect tax though businesses are responsible for reporting it fully to HMRC.

If your business turnover exceeds £85,000, you are legally required to register for VAT. This will require you to charge VAT on all services or goods your business offers. You can only charge VAT if you are registered to do so. VAT registration will also allow you to reclaim VAT on goods and services purchased by your business.

VAT-registered businesses must report the amount of VAT they have charged or paid to HRMC via a VAT return usually completed every three months. You must complete this even if you have no VAT to report. Over-charges of VAT by you to the customer must be paid to HMRC. If you have paid more VAT than you have charged your customers, then this difference can be reclaimed from HMRC.

You can no longer submit your VAT returns manually. The use of MTD compatible software is mandatory for VAT periods starting on or after 1st April 2022. Making Tax Digital (MTD) for VAT requires VAT registered businesses to keep their VAT records digitally and use HMRC recognised software to submit their VAT returns.