How To Do A VAT Return: A Step-By-Step Guide For UK Businesses

Doing a VAT return isn’t exactly the most exciting part of running a business. But getting it right is important. A mistake could mean paying more tax than needed or even facing penalties from HMRC.

If the thought of VAT returns makes your head spin, don’t worry—you’re not alone! Many business owners find it confusing, but with the right approach, it doesn’t have to be stressful. This VAT return guide has no confusing jargon, just simple and clear instructions.

For expert help, Bells Accountants is here to support you. We help businesses in Kent like yours stay on top of VAT returns without the hassle. Whether you need help filing, understanding VAT rules, or just want to be sure you’re not paying more than necessary, we’re here to help.

Call us directly on 020 8468 1087 or email our team at to book a consultation.

What Is A VAT Return?

A VAT Return is a form used to report the VAT you’ve charged and paid to HMRC, usually every 3 months. It summarises your VAT transactions, showing:

• The VAT you’ve charged on sales (output VAT).
• The VAT you’ve paid on business expenses (input VAT).
• You either owe HMRC the amount or can reclaim it.

If your VAT-registered business collects more VAT from customers than it has spent on purchases, you must pay the difference to HMRC. If you’ve spent more than you collected, you may be eligible for a VAT refund.

The process of VAT return filing ensures that businesses comply with tax regulations while managing cash flow effectively. Missing VAT return deadlines or submitting incorrect figures can lead to penalties and interest charges, so it’s crucial to get it right!

Who Needs To Submit A VAT Return?

Your business must submit VAT returns if:

• You are VAT-registered (your turnover exceeds the £90,000 VAT threshold).
• You voluntarily registered for VAT (even if your turnover is below the threshold).
• You use the VAT Flat Rate Scheme, Standard Rate Scheme, or Cash Accounting Scheme.

Even if your business hasn’t made any sales in a particular period, you must still submit a nil VAT return to stay compliant.

Read our simple guide to learn how to register your business for VAT.

How To Do A VAT Return – Step By Step Guide

Now, let’s break down the VAT return process into simple steps so you can confidently submit your VAT return online.

Step 1: Gather Your VAT Records

Before filing your VAT return, collect:

• Sales invoices – to check how much VAT you charged customers.
• Purchase receipts – to track how much VAT you paid on business expenses.
• VAT invoices from suppliers.
• Bank statements to cross-check transactions.

Tip: Use accounting software like Xero, QuickBooks, or FreeAgent to automate VAT calculations and store invoices in one place.

Step 2: Work Out Your VAT Figures

You’ll need to calculate:

• Total sales (excluding VAT)
• Total purchases (excluding VAT)
• Output VAT (VAT on sales)
• Input VAT (VAT on purchases)

Formula:

VAT due to HMRC = Output VAT – Input VAT

• If your output VAT exceeds your input VAT, you owe money to HMRC.
• HMRC may refund the difference if your input VAT exceeds your output VAT.

Example:

Your business charged £12,000 + VAT (£2,400) = £14,400 in total sales.

You paid £4,000 + VAT (£800) = £4,800 on business expenses.

Your VAT bill = £2,400 – £800 = £1,600 owed to HMRC.

Step 3: Submit Your VAT Return Online

Since Making Tax Digital (MTD) became mandatory, all VAT-registered businesses must submit VAT returns online using accounting software or HMRC’s VAT online system.

How to submit VAT return via MTD software:

• Log into your HMRC VAT account.
• Enter VAT figures (or let your software handle it).
• Check for errors before submitting.
• Submit and save a confirmation receipt.

Tip: Double-check all figures before submission to avoid VAT penalties from HMRC!

Also Read: VAT Returns Process For Small Business

VAT Return Deadlines – When To Submit?

You must submit VAT returns and pay any VAT owed by the 7th of the second month after your VAT quarter ends.

VAT return deadlines:

Tip: Set a calendar reminder or automate VAT payments to avoid late penalties!

Common VAT Return Mistakes & How To Avoid Them

1. Forgetting To Claim VAT On Expenses

Solution: Keep all receipts & use accounting software for tracking.

2. Missing VAT Return Deadlines

Solution: Set up reminders & file early.

3. Incorrect VAT Calculations

Solution: Use a VAT calculator or get help from an accountant.

4. Not Using The Correct VAT Scheme

Solution: Review whether the Flat Rate or Cash Accounting schemes suit your business.

5. Overpaying Or Underpaying VAT

Solution: Regularly check transactions & reconcile VAT returns.

Trust Bells Accountants To Guide You With VAT Returns

VAT returns are probably not the most exciting part of running a business. They can be time-consuming and confusing, and, if done incorrectly, could lead to penalties. But that’s where Bells Accountants comes in!

With over 60 years of experience, our ACCA, ICAEW, and AAT level accountants help UK businesses stay compliant while maximising VAT efficiency. We take the stress out of VAT return filing, ensuring accuracy and on-time submissions.

Why Choose Us?

• Expert VAT management – We handle everything from VAT registration to submission.
• MTD-compliant software – We work with Xero, QuickBooks, Sage, and more.
• Deadline reminders – Never miss a VAT return deadline again.
• VAT planning & efficiency – We help you reduce liabilities and reclaim eligible VAT.
• Clear communication – No jargon, just straightforward advice.

Call us on 020 8468 1087 or email our team at today and let us handle the VAT so you can focus on growing your business.

Final Thoughts

That is all about the VAT return guide; we hope it will help you manage VAT return filing without hassle.

If you’re still unsure how to do a VAT return or have any questions, let Bells Accountants take care of it. Focus on growing your business while we handle the numbers!

Stay VAT-compliant and tax-efficient—Contact us today to book a free consultation today!