VAT

At Clear Start Accountants, our qualified and experienced team handles your VAT reporting and returns throughout the year.

With the perfect blend of advanced accounting software, tax expertise, and a dedicated client manager, we ensure compliance with HMRC’s Making Tax Digital rules—providing the support you need to stay on top of your obligations.

What is VAT?

Value Added Tax (VAT) is a tax applied to the purchase of goods and services. If you’re a business, you may be required to register, collect, and pay VAT.

Businesses with an annual turnover exceeding £85,000 (the VAT registration threshold) must register for VAT. This means adding VAT to the goods and services they sell, collecting it from customers, and paying it to HMRC when filing their quarterly VAT returns.

Staying VAT compliant is a critical part of managing your business finances effectively.

Understanding Your VAT Registration Number

When your business registers for VAT, the government assigns a unique nine-digit VAT registration number, prefixed with ‘GB’.

This number is exclusive to VAT-registered businesses and is provided on your VAT registration certificate. The certificate also includes important details such as the date your company exceeded the VAT registration threshold and the due date for your first VAT return.

Having your VAT registration number is essential for compliance and conducting business transactions that require VAT documentation.

When is My VAT Payment Due?

To check your VAT Return and payment deadlines, simply sign in to your Government Gateway and access your VAT online account.

Your VAT online account provides key information, including:

• The due date for submitting your VAT Returns.
• The deadline by which your payment must clear into HMRC’s account.

Typically, VAT submission and payment deadlines are the same, calculated as one calendar month and seven days after the end of your accounting period.

Example

If your VAT period ends on March 31, the VAT owed must be paid by May 7. For businesses paying by direct debit, the payment is usually collected three days after the VAT return deadline.

Staying on top of your VAT deadlines ensures compliance and avoids unnecessary penalties.

How to Determine Your VAT Payment Deadline

To find out when your VAT payment is due for the current accounting period, visit HMRC’s website for accurate and up-to-date information.

Important Notes:

• The online calculator is unavailable if you pay on account or use the Annual Accounting Scheme.
• Use approved accounting software to submit your VAT return and maintain compliant digital records, in line with HMRC’s Making Tax Digital requirements.

Staying informed and using the right tools ensures timely submissions and smooth compliance with VAT obligations.

How Does VAT Work?

Businesses registered for VAT are required to submit VAT returns to HMRC on a monthly, quarterly, or annual basis, depending on their accounting scheme.

A VAT return provides a summary of:

• VAT collected on sales (output VAT).
• VAT incurred on business expenses (input VAT).

If the VAT collected on sales exceeds the VAT incurred on expenses, your business must pay the difference to HMRC. Conversely, if the VAT incurred is greater than the VAT collected, HMRC will refund the difference.

Timely and accurate VAT reporting ensures compliance and avoids potential penalties.

Paying Your VAT Bill

HMRC accepts payments via Direct Debit or Internet Banking only. Cheques are not an accepted method of payment.

If you are experiencing difficulties making a payment, it’s important to contact HMRC immediately to discuss your options and avoid potential penalties.

Ensuring timely payments helps maintain compliance and prevents disruptions to your business.

Is Your Business Ready for Making Tax Digital (MTD) for VAT?

Making Tax Digital (MTD) has revolutionized how UK businesses manage their taxes. It is now mandatory for all VAT-registered businesses to maintain digital records and submit VAT returns through approved accounting software.

At Clear Start Accountants, we utilize Xero, a leading MTD-compliant software, to simplify the process for you.

Our services include:

• Filing VAT returns digitally in compliance with MTD regulations.
• Providing expert VAT advice and assistance whenever needed.

Ensure your business stays compliant with MTD and let us handle the complexities of VAT for you.