Debitoor's accounting dictionary
VAT report

VAT report - What is a VAT report?

A VAT report is a financial document that summarises a company’s VAT-eligible transactions over a specified accounting period, helping the company complete their VAT Return.

Looking to speed-up your VAT Return? With Debitoor invoicing software you can create automatic VAT reports in a matter of seconds. Try Debitoor free for 7 days.

If a company is registered for VAT, they must charge VAT on eligible sales (output VAT) and can reclaim the VAT on any purchases made by the business (input VAT).

However, rather than paying and reclaiming VAT from HMRC after each sale or purchase, businesses submit a VAT Return all the end of each accounting period to declare how much VAT they should pay or reclaim for the specified period.

A VAT report supports the VAT Return process by listing all of the information related to a company’s input and output VAT and calculating the overall amount of VAT the business should pay or reclaim from HMRC.

How to fill in a VAT Report

VAT reports should contain nine boxes which correspond to specific parts of the VAT Return process.

If you use invoicing and accounting software to create automatic VAT reports, your software will use the data in your account to automatically calculate the value of each box.

Box 1: VAT due in the period on sales and other outputs

This box includes all of the VAT due on the goods and services you sold throughout the quarter. This should not include any VAT on credit notes which you have issued to customers, or zero-rated exports or supplies to other EC (Economic Community) member states.

Box 2: VAT due in the period on acquisitions from other member states of the EC

Box 2 should include all the VAT due on goods from other EC member states, as well as any related costs such as delivery, packaging, or insurance.

Box 3: total VAT due

By adding the figures from boxes 1 and 2, box 3 shows the total VAT you owe HMRC for the period. This is your ‘output VAT’ or ‘output tax’.

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

Box 4 shows your ‘input VAT’ – the total amount of VAT paid on purchases made by your business. You should only include purchases which can be supported by a VAT invoice, and you must not include any purchases intended for business entertainment or solely for personal use.

Box 5: net VAT to be paid or reclaimed from HMRC

Box 5 is the total amount of VAT you owe or are owed, which is calculated using your input and output VAT. If your output tax (box 3) is higher than your input tax (box 4), you must pay the difference to HMRC. If your input tax is higher than your output tax, HMRC will refund the difference.

Box 6: total sales and outputs, excluding VAT

This box may include outputs such as zero-rate or exempt supplies, exports, reverse charge transactions. However, you should not include loans, insurance claims, dividends, or money put into the business by yourself or other partners.

Box 7: purchases and other inputs, excluding VAT

In box 7, you should include the value of imports, purchases from VAT-registered suppliers in other EC member states, and reverse charge transactions. You should not include not wages, salaries, PAYE, or National Insurance contributions.

This is the total of all goods supplied to other EC member states, as well as any directly related costs that were included in the contract or invoice such as shipping or freight costs. You should not include supplies of services related to the supply of goods that have been invoiced separately or any unrelated services.

The final box should show the total value of any goods purchased from VAT-registered suppliers in other EC countries (as well as any directly related costs). You should also include services related to acquisitions, unless they have been invoiced separately.

VAT reports and VAT accounting schemes

If your business uses certain VAT accounting schemes, you may need to follow different rules when creating a VAT report. For example:

  • Annual Accounting VAT Scheme: usually, businesses need to complete VAT Returns on a quarterly basis, meaning that they need to create four VAT reports per year. However, businesses registered under this scheme only need to submit a VAT Return on an annual basis and therefore only pay or reclaim VAT once a year.

  • Cash Accounting VAT scheme: if your business uses the Cash Accounting VAT Scheme, the figures recorded in your VAT report should be based on when you recieve or make payments, rather than when you raise or recieve invoices.

VAT reports and Debitoor

If your business is VAT registered, you may need to submit VAT reports on a regular basis. Debitoor invoicing software makes this process quick and easy by helping you create up-to-date VAT reports in just a few seconds.

Every time you raise an invoice or create an expense, Debitoor will update your monthly, quarterly, and annual VAT reports to give real-time insight into how much VAT you should pay or reclaim. The report is automatically filled in using the data in your account, and has numbered sections to correspond to HMRC’s online VAT Return.

And if your company is required to submit online VAT Returns via Making Tax Digitial software, you can use Debitoor to report your VAT directly to HMRC.

Create automatic VAT reports with Debitoor accounting and invoicing software

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