Getting to the turnover which requires your business to be VAT registered represents a significant milestone in your business journey. With VAT registration however, also comes added responsibilities which may be daunting for you, especially when you are filing your first return. Here, we will share some helpful hints to get you ready for completing your first VAT return.
When is Your First VAT Return Due?
When you register for VAT you will be able to select your VAT quarter (i.e. whether you file
Quarterly and monthly VAT returns and payments are due 1 month and 7 days after the end of a VAT period (the rules are different if you’ve signed up for the annual accounting scheme). You’ll have chosen your VAT period end date when you registered for VAT.
If you aren’t sure when your VAT period ends then log into your VAT online account to check, this contains essential information about your registration, access to your VAT registration certificate and payment information.
Set Up a Digital Bookkeeping System
You need to be registered for HMRC’s making tax digital scheme. This means that you need to submit your VAT returns using compliant software, such as Xero, Quickbooks or Sage. All of your sales and purchases will need to be recorded in this software system so that the correct figures can be generated for your VAT return. Your software will be able to then submit your VAT return for you.
Which Sales are included on your first VAT return?
All sales from the date you are registered for VAT. VAT must be paid on these invoices, whether you can recover it from your customers or not.
What can you claim back on your first return?
VAT you have paid on goods and services in your business from the date you become registered for VAT. If you do use something for business and personal reasons, you’ll be able to claim back VAT on the business portion.
For example, you use your laptop for business reasons 75% of the time and 25% personal. You’ll be able to claim back 75% of the VAT you paid for the laptop.
You can also go back and claim VAT on expenses you purchased within the last 4 years for goods you still have, or that were used to make other goods you still have and 6 months for services the business received.