VAT returns

Managing VAT returns can be a complex and time-consuming task for businesses. However, Global Trade Business is here to simplify the process and provide comprehensive support, ensuring effortless VAT return compliance.

An experienced accountant can assist with VAT return preparation, filing, and compliance, using their expertise to manage VAT submissions and help you navigate HMRC regulations.

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Do you have to file a VAT return?

Introduction to VAT returns

VAT (Value Added Tax) is a tax applied to most goods and services sold in the UK. If your business is VAT registered, you are required to submit VAT returns to HM Revenue and Customs (HMRC) on a regular basis. These VAT returns detail the amount of VAT your business has charged on sales and the amount of VAT paid on purchases during the VAT return period.

Most businesses submit their VAT returns quarterly, but some may have different reporting periods depending on their circumstances. To get started, you must register your business for VAT with HMRC and obtain a VAT number. Once registered, you can submit your VAT return online through the HMRC portal, ensuring that all relevant sales and purchase information is included.

Submitting accurate VAT returns is essential for staying compliant with UK tax regulations and avoiding penalties from Revenue and Customs.

Businesses that are registered for VAT in an EU member state and meet certain criteria are generally required to file an EU VAT return.

After VAT registration, businesses must prepare and submit their first VAT return, which may involve connecting to HMRC's VAT online service platform to import VAT figures and ensure compliance before making the initial submission.

The requirement for a fiscal representative to file a VAT return depends on the specific rules and regulations of the country where you are registered for VAT. In some countries, appointing a fiscal representative is mandatory for certain types of businesses or non-resident taxpayers. The HMRC portal is the VAT online service businesses use to submit returns.

How often do you need to file the VAT return?

The frequency of filing EU VAT returns depends on the specific regulations of each EU member state. The frequency of VAT return filing is determined by the business's accounting period, which can be monthly, quarterly, or annually.

Generally, businesses are required to file VAT returns on a regular basis, such as monthly, quarterly, or annually. Here are the most common filing frequencies:

Monthly returns: Some businesses may be required or may choose to submit VAT returns every month, which can help with cash flow management and may require approval from tax authorities.
Quarterly returns: This is the standard filing frequency for many businesses.
Annual returns: Certain schemes, such as the Annual Accounting Scheme, allow eligible businesses to submit one VAT return per year.

The deadline for submitting a VAT return is typically one calendar month after the end of the accounting period, though this may vary depending on the specific VAT scheme and country.

Monthly
VAT Returns

Some EU member states require monthly VAT returns. This means that businesses must file a VAT return every month, reporting their VAT transactions for that period.

Quarterly
VAT Returns

Many EU member states have quarterly VAT reporting periods. In this case, businesses file a VAT return every quarter, summarizing their VAT activities for that three-month period.

Annual
VAT Returns

Some EU member states, particularly for businesses with lower turnover or specific types of activities, may allow for annual VAT returns. This means that businesses file a single VAT return at the end of the tax year, reporting their VAT transactions for the entire year.

💡How Global Trade Business can help with filing the VAT returns?

Expertise and Knowledge：We are familiar with the local VAT regulations, requirements, and procedures and your VAT return is prepared accurately, taking into account all relevant rules and regulations,

Language and Communication：If you are operating in a country where the official language is different from your own, we can effectively communicate with the tax authorities on your behalf, ensuring that all necessary information is accurately conveyed and understood.

Time and Resource Savings: VAT compliance can be complex and time-consuming, particularly if you are unfamiliar with the local regulations. Engaging us can allow you to focus on your core business activities while ensuring that your VAT obligations are met.

Local Representation: We act as your local representative for VAT purposes and help ensure a smooth relationship with the tax authorities.

Compliance Assurance: We can help monitor changes in VAT regulations, keep you informed of any updates or new requirements, and ensure that your VAT returns are filed on time. This reduces the risk of non-compliance and potential penalties.

Preparing for a VAT return

Before submitting your VAT return, it’s important to gather all the necessary financial records for the relevant VAT return period. This includes keeping detailed VAT invoices for both sales and purchases, as HMRC may request to review these documents. Using accounting software can help businesses track VAT transactions, calculate the correct figures, and ensure they are fully compliant with HMRC requirements.

Businesses can submit their VAT returns online using their VAT online account, making it easy to pay any VAT due and keep records up to date. By staying organized and using reliable software, businesses can streamline the VAT return process and reduce the risk of errors or missed deadlines.

Making Tax Digital initiative

The Making Tax Digital (MTD) initiative is a government program designed to make it easier for VAT registered businesses to keep digital records and submit VAT returns online. Under MTD, most businesses with a taxable turnover above the VAT threshold are required to use MTD compatible software to record their VAT transactions and submit their VAT returns directly to HMRC.

This digital approach helps ensure that VAT returns are accurate, timely, and fully compliant with HMRC regulations.

By adopting MTD compatible accounting software, businesses can automate much of the VAT return process, reduce paperwork, and minimize the risk of errors. Staying up to date with the Making Tax Digital requirements is essential for all VAT registered businesses in the UK.

Calculating Net VAT

To calculate net VAT for your VAT return, you need to determine the total VAT due on your sales (outputs) and the total VAT you can reclaim on your purchases (inputs) during the VAT return period.

The net VAT is the difference between these two amounts. If the VAT due on sales is greater than the VAT reclaimed on purchases, you will need to pay the difference to HMRC. If the VAT reclaimed is higher, you may be eligible for a VAT repayment.

Using accounting software and your VAT online account can help you accurately calculate net VAT, submit your VAT returns, and pay any VAT due. This ensures your business remains compliant and avoids costly mistakes when dealing with total VAT, sales, purchases, and other VAT transactions.

Late VAT Return and Penalties

Missing the VAT return deadline can result in penalties from HMRC. If your VAT return is not submitted on time, HMRC will record a default and may apply a surcharge based on your business’s annual turnover and the amount of VAT outstanding on the due date.

To avoid these penalties, it’s important to submit your VAT returns and pay any VAT due by the required date.

Accounting software can help you keep track of deadlines and ensure your VAT return is accurate and submitted on time. If you are unable to submit your VAT return by the due date, contact HMRC as soon as possible for support and guidance.

Staying organized and using your online VAT account can help your business avoid late VAT return penalties and remain fully compliant with HMRC requirements.

EU VAT returns process

Receive your VAT number and prepare for your VAT return

After receiving the VAT number, you are required to file the VAT returns regularly (monthly/ quarterly / yearly)

You will have to send us the declaration materials and we will prepare for the VAT return and submit iton time.

Collect required data and documents

If you need to pay the VAT to the admin, you will have to make sure the payment can arrive to the administration's account before the deadline.

VAT payment

Frequently asked questions

European VAT refund

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VAT Registration

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VAT Returns

Our Services

The 13th Directive and the EU VAT Refund Directive (Directive 2008/9/EC) are both mechanisms that allow businesses to claim Value Added Tax (VAT) refunds in European Union (EU) member states. However, there are some key differences between these two directives. Here are the main distinctions:

Scope and Applicability:

13th Directive: The 13th Directive specifically applies to businesses located outside the EU that do not have a VAT registration within the EU. It is designed for non-EU businesses to claim VAT refunds on eligible expenses incurred in EU member states.
EU VAT Refund Directive: The EU VAT Refund Directive applies to businesses established within the EU, allowing them to claim VAT refunds on expenses incurred in other EU member states. It is applicable to VAT-registered businesses within the EU seeking cross-border VAT refunds.

Application Process:

13th Directive: Under the 13th Directive, non-EU businesses need to submit a VAT refund application to the tax authorities of the EU member state where the VAT was paid. The application is typically made using a specific form provided by the tax authority.
EU VAT Refund Directive: The EU VAT Refund Directive introduces a simplified and streamlined process for VAT refund claims within the EU. Businesses can apply for refunds electronically through their home country's tax authority, rather than submitting applications directly to each member state.

Under the 13th Directive, non-EU businesses can claim VAT refunds on directly related business expenses incurred in European Union (EU) member states. While the specific eligibility criteria may vary between countries, here are some examples of expenses that are commonly considered directly related to business activities:

Accommodation Expenses: VAT paid on hotel stays or rental accommodations for business purposes, such as attending conferences, trade shows, or client meetings, can typically be claimed under the 13th Directive.
Meal Expenses: VAT paid on meals or restaurant bills incurred during business-related activities, such as client meals, team meetings, or business travel, may be eligible for a VAT refund.
Transportation Costs: VAT paid on transportation expenses directly related to business activities, such as airfare, train tickets, taxi fares, or car rentals, can often be claimed under the 13th Directive.
Trade Show or Exhibition Expenses: VAT paid on expenses related to participating in trade shows, exhibitions, or conferences, including booth rentals, registration fees, promotional materials, and related services, may be eligible for VAT recovery.
Professional Services: VAT paid on professional services directly related to your business activities, such as legal fees, consulting fees, or marketing services, may be eligible for a VAT refund.
Business Entertainment: VAT paid on entertainment expenses incurred for bona fide business purposes, such as client entertainment events, team-building activities, or business-related social functions, might be eligible for VAT recovery.

The documentation requirements for claiming VAT refunds can vary between countries and depend on the specific rules and regulations of the tax authority where you are submitting your VAT refund application. However, here are some common types of documentation that are often required:

Valid VAT Invoices: You will typically need to provide original VAT invoices or receipts for the expenses on which you paid VAT. The invoices should include the necessary details, such as the supplier's name and address, your business's name and address, the invoice date, a unique invoice number, a description of the goods or services, the VAT rate applied, and the amount of VAT paid.
Proof of Payment: You may be required to provide evidence of payment for the expenses on which VAT was paid. This can include bank statements, credit card statements, or other forms of payment documentation that demonstrate the payment was made.
Import/Export Documentation: If you are claiming VAT refunds on import or export transactions, you may need to provide additional documentation such as customs declarations, shipping documents, import/export licenses, or proof of export.
Proof of Business Purpose: Some tax authorities may require you to provide evidence that the expenses for which you are claiming VAT refunds were incurred for business purposes. This can include supporting documents like travel itineraries, conference agendas, or contracts that demonstrate the business nature of the expenses.
VAT Refund Application Form: You will likely need to complete a VAT refund application form provided by the tax authority. The form will require you to provide information about your business, VAT registration details, the reporting period for which you are claiming the refund, and details of the eligible expenses.

Please note that the specific documentation requirements can vary significantly between countries. Some countries may have more stringent requirements, while others may have simplified procedures for VAT refund applications.

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VAT returns

Do you have to file a VAT return?

Introduction to VAT returns

How often do you need to file the VAT return?

Monthly
VAT Returns

Quarterly
VAT Returns

Annual
VAT Returns

💡How Global Trade Business can help with filing the VAT returns?

Preparing for a VAT return

Making Tax Digital initiative

Calculating Net VAT

Late VAT Return and Penalties

What are the differences between the 13th Directive and the EU VAT Refund Directive?

What VAT can be refunded under 13th Directive?

What documents are required for claiming the VAT refund?

Talk to one of our experts in order to expand the business in the most efficient way.

VAT returns

Do you have to file a VAT return?

Introduction to VAT returns

How often do you need to file the VAT return?

Monthly VAT Returns

Quarterly VAT Returns

Annual VAT Returns

💡How Global Trade Business can help with filing the VAT returns?

Preparing for a VAT return

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Making Tax Digital initiative

​

Calculating Net VAT

​

Late VAT Return and Penalties

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What are the differences between the 13th Directive and the EU VAT Refund Directive?

What VAT can be refunded under 13th Directive?

What documents are required for claiming the VAT refund?

Talk to one of our experts in order to expand the business in the most efficient way.

Monthly
VAT Returns

Quarterly
VAT Returns

Annual
VAT Returns