The brand-new Making Tax Digital policy greatly affects how the UK pay their taxes. In the majority of ways, it helps make tax filing faster and more efficient. Making tax returns is a breeze. Filing your HMRC VAT return is not an exception. The information you must submit hasn’t changed, but the way you submit it. Now, you can filing VAT returns online. There are regulations to be followed and penalties if you do not. This post will provide all of the essential information about filing an HMRC tax return online.
Important Takeaways
- VAT returns are used by VAT-registered businesses to report the amount of VAT charged customers as well as what amount you owe in purchase tax and VAT payments for goods and services purchased.
- Additionally, all VAT-registered businesses are registered with MTD for reporting purposes.
- The information a company must submit with its return has remained constant; however, penalties have changed to reflect tardy returns or mistakes in filing returns on time and incorrect filing.
Here’s What We Will Cover:
- What is an VAT Return?
- Implementing Tax Digitality for VAT
- What Should Be Included in an VAT Return
- How to Submit Online VAT Returns * 8 Steps for Submitting an Online VAT Return
- Conclusion
- Frequently Asked Questions (FAQs) (in PDF form).
What is an tax return?
It is the UK tax rate for VAT is 20%. It is applicable to the majority of goods and services, with some exemptions, such as child’s clothing and household power and fuel. All UK business is required to register when its tax-deductible turnover exceeds
£85,000. The business can join if they are within the £85,000 VAT tax taxable turnover threshold.
In April 2022onwards, Making Tax Digital VAT regulations were implemented for all VAT registered companies and not only those who are above the threshold for VAT.
VAT returns are how VAT registered companies are required to report two vital elements of data to HMRC:
- VAT you Charge your customers
- VAT that you pay for goods and services that you use for your company
HMRC computes the gap between the VAT collected and the amount paid. It is then either your VAT invoice or the refund amount for VAT.
You have to send these forms online to HMRC each 3 months, with the right accounting software, even if you do not owe the tax or VAT you wish to claim.
You’re also obliged to keep digital VAT records that are the documentation of your cost of sales and expenses and the VAT you owe to HMRC as well as the VAT you’re entitled to claim.
Make Tax Digital to VAT for Making
All VAT-registered companies are registered with MTD. HMRC continues to register new businesses that are VAT registered in the future.
It is imperative to keep all VAT records in electronic format so that you are compliant with MTD to comply with VAT regulations. It is essential to download and scan any hardcopy receipts or invoices and save them in your computer. It can be a long and tiring process, particularly if unfamiliar with digital filing. Fresh books MTD-compliant software can simplify the procedure for you. It takes the hassle out of VAT filing online and lets you focus on the most important aspects of your company.
What Information Should Be Included in the tax return for VAT?
The information you must submit for your VAT return is the same. Only one change is that the process is now digital. The following are still required:
- Your total purchases and sales.
- Amount of VAT that you must pay.
- How much VAT you are able to recover.
- How much VAT that you owe to HM Revenue and Customs (HMRC) (if you’re seeking tax on your business expenditures)
If you get goods or services in lieu of money, you have to report the VAT that is based on the amount. It is assumed that VAT is incorporated into the cost of the item you are selling and, therefore, even if you sell something that is not VAT-free it is still necessary to pay VAT.
If your company is subject to import VAT, you may claim it through delayed VAT accounting, thus permitting you to claim it as an expense of business.
Failure to report accurately your VAT could result in an 100 percent penalty on any tax that is over or not reported.
How to File Tax Returns online for VAT
You can file the VAT tax return on-line using two methods: having an agent appointed to handle the work or using software compatible with. Only tax-exempt individuals are able to submit a paper-based return in addition, the HMRC must accept your exemption.
To file online with software, be sure to established an account on your Making Tax Digital online VAT account using HMRC via the Government Gateway account using your government gateway user ID. Once you have that set up connection, you are able to connect your application. Certain software needs the use of a bridge software in order to connect it to the portal.
If you’re using FreshBooks Accounting software it is fully connected to HMRC’s portal. Additionally, you’ve collected the necessary Making Tax Digital for VAT records. This means that you’re prepared to file tax returns for VAT at conclusion of each quarter, with a minimum of effort and time.
8 Steps to File Tax Returns Online
The most straightforward method to submit your VAT return online is to make use of FreshBooks the accounting program. FreshBooks allows you to send your VAT return directly to HMRC in just eight steps:
- Navigate to the Integrations section in your FreshBooks Account
- Click 1ClickMTD
- Click the Start a Submission button
- Choose a period from the “Period to File” dropdown menu
- Make sure that the figures are correct on your VAT Return Report.
- Find any errors in your FreshBooks account.
- Make sure you tick in the declaration of legality box. It reads, ‘I affirm that the period of VAT has been complete and includes all transactions relevant to it.’
- Click Submit
You’ll receive a reassuring on-screen confirmation that your submission was successful. filing to HMRC.
FreshBooks stores the most recent VAT returns under the Actions in Past Submissions. From this page, you are able to make your VAT return printable as PDF, if you prefer an original paper copy.
This guide is that will help you pay taxes on your UK VAT bill more pleasant.
Conclusion
Changes can be difficult. Tax changes can be a bit terrifying. However, moving from paper filing to digital doesn’t need to be a nightmare. By using FreshBooks finance and accounting software you can file taxes online simpler to complete, quicker and more efficient. Automate your VAT admin using FreshBooks. You’ll spend less time managing your finances and spend more time focusing on the most important aspects of your company. Keep tax filing brief, easy and easy.
As the editor of the blog, She curate insightful content that sparks curiosity and fosters learning. With a passion for storytelling and a keen eye for detail, she strive to bring diverse perspectives and engaging narratives to readers, ensuring every piece informs, inspires, and enriches.
