What happens after you receive a VAT registration?

You will be advised through an email or a letter that you have got a VAT registration number. (See our VAT Registration page). Sometime later you will receive a VAT registration certificate. If you get registered through a tax agent, ask for a VAT certificate to be emailed to you. It does not matter if you have a scanned copy or receive a hard copy of such certificate. What is important are the details needed to register for VAT filing online. Make sure you know:

• Your full business name as it is stated in the VAT certificate
• The VAT number
• The exact VAT registration address (for some businesses it is the address of their tax agent)
• The date of registration
• The periods of the first VAT return

What is included in a VAT return and how is it calculated?

There are 9 boxes in total you have to fill in.

Box 1 – VAT due in the filing period on all sales and other outputs

In box 1 include all VAT due on all taxable supplies: goods or services you provided to your customers. This VAT is called ‘’output VAT’’ – VAT you received from your customers when you send out your invoices to them. This is the easiest way to remember this term.

This section does not include any export or dispatches as they should be zero rated.

However, you need to include all import VAT due as a result of postponed accounting.

Other VAT you receive should be included as well: sale of stocks and assets, goods you take out of the business for own use, VAT accounted for as a reverse charge, supplies to staff, VAT shown on self-billed invoices issued by your customer, distance sales to Northern Ireland which are above the distance selling threshold or, if below the threshold the overseas supplier opts to register for VAT in the UK, commission received for selling something on behalf of someone else.

Box 2 – VAT due in the period on acquisitions of goods made in Northern Ireland from EU Member States

From 1 January 2021 you will only be allowed to make acquisitions on goods you bring into Northern Ireland from the EU. For acquisitions you should show the VAT due on all goods and related costs bought from VAT-registered suppliers in EU member states.

From 1^st of January 2021 this box should be used only for acquisitions on goods brought into Northern Ireland from the EU. The box shows all VAT due on goods and costs bought from VAT-registered suppliers in EU.

Box 3 – Total VAT due

This is the total output VAT for the filing period and represents boxes 1 and 2 added together.

Box 4 – VAT reclaimed in the period on purchases and other inputs

This should be the total of all VAT charged to you during the VAT filing period. This box is the total of input VAT and represent the total of all incoming invoices. The amount should include the VAT reclaimed on all imports accounted for as postponed VAT accounting.

You cannot reclaim VAT unless you have supporting evidence:

• For purchases this should be VAT invoices
• For import C79 or other relevant documents (see HMRC Notice 700 for more details)

Box 5 – Net VAT to HMRC or reclaim from HMRC.

This should be the difference between boxes 3 and 4. Take both amounts and deduct the smaller from the larger. If the return is calculated through an accounting software, this figure will be calculated automatically.

Box 6 – Total value of sales and other outputs excluding VAT

This box should show the total value of all sales made during the VAT filing period excluding VAT.

Box 7 – The total value of purchases and other inputs excluding VAT

This box should show the total value of purchases and expenses without any VAT. This should include the value of imports, acquisitions of goods brought into Northern Ireland from EU, reverse charge transactions.

Box 8 – All supplies of goods and related costs to EU made on or before 31^st of December 2020.

Th box should include all supplies of goods to EU and directly related costs made up to the end of 2020. Figures included in this box must be included n box 6 as well.

This box is also for supplies of good and related costs from Northern Ireland to EU from 1^st of January 2021.

Box 9 – The total of all acquisitions of goods and related costs from EU up to 31^st of December 2020.

This box should be used to record all acquisitions of goods from VAT-registered suppliers in EU and directly related costs. The figure from this box must also be included in box 7 total of the return.

From 1^st of January 2021 the sales to EU are no longer classed as acquisitions. They are called imports and should be treated as standard imports.

From 1^st of January only the acquisitions of goods and related costs from EU to Northern Ireland should be included in this box.

How often are VAT returns submitted?

Unlike the EU VAT filing rules, VAT registration businesses in the UK are required to file regularly on a quarterly basis. The first VAT filing return is usually different. You may also ask to change the VAT filing frequency. (See the section Changes to VAT Registration Details).

What are the deadlines for VAT returns?

In the UK, HMRC required all VAT registered businesses to file their VAT return by the 7^th of the second month after the end of the VAT filing period. For example, if we are filing for the period from 01/01/21 to 31/03/21, we have got till the 7^th of May to file our VAT return. The payments of VAT owed to HMRC should be made by the same deadline.

Sometimes, our clients are surprised to receive a late payment penalty, when they made the payment before or on the 7^th. This primarily affects our international clients who make payments from their overseas accounts. When paying from overseas one should bear in mind that such payments may take a few days. HMRC require the payment hit their account by the deadline. If this does not happen the late filing penalty cannot be disputed.

WHAT HAPPENS IF I DO NOT FILE MY VAT RETURN IN TIME FOR THE DEADLINE?

Surcharges and Penalties

Every time you fail to submit a VAT return in time for the statutory deadline, HMRC will record a surcharge against you. The same process applies to late VAT payments. You may be entered in a 12-month period. During this period HMRC will be monitoring your account. Every time you default the 12 months period is extended.

You will not have to pay a surcharge if:

• The amount of VAT due is zero
• The VAT is paid in full by the deadline
• You are due a VAT repayment

How much is my surcharge?

Surcharge is normally calculated as a percentage of the VAT outstanding on the due date of the VAT return.

Penalties

In case of careless or deliberate inaccuracy: 100 % of any VAT under-stated or over-claimed

If HMRC send you an assessment and you do not tell them it is wrong within 30 days: 30% of an assessment

If you submit a paper VAT return and are not exempt from MTD: £400

How to make changes to your VAT registration details?

You must keep your VAT details up-to-date. Any time a change occurs in your details of the details of the business, they need to be reported to HMRC within 30 days.

The VAT changes can be submitted online, through the form VAT484 or by a webchat or phone call to HMRC.

Change of VAT details form VAT 484 scan be used to

• change the name of a business
• change the company address or contact details
• change or add of bank details
• change VAT return dates
• change of owner of the business

VAT AGENT SERVICES IN THE UK

VAT agent is normally an accountancy firm who will support you in all your tax matters and will bear all responsibilities on your behalf.

Unlike some in some countries of the EU, it is not an obligation to have a VAT agent in UK.

However, it is quite desirable by HMRC. If a business appoints a VAT tax agent officially, the tax office have a contact in the UK who will respond to all the queries and will be held responsible for filing VAT returns and paying VAT.

Our experience shows that businesses who use services of a responsible VAT agent, are less likely to miss deadlines or make mistakes in their VAT returns.

VAT agent plays a crucial part during VAT checks and investigations if they happen.

See more details in our VAT Agent and VAT Inspections Sections.