Debitoor Dictionary

Accounting terms explained simply

Over 300 Articles for Founders and Entrepreneurs

  1. Self assessment
  2. Tax accounting
  3. VAT
  4. VAT registration
  5. VAT report

VAT Return - What is a VAT Return?

A VAT Return calculates how much VAT should be paid to, or reimbursed by, HM Revenue and Customs (HMRC). VAT Returns are usually submitted four times a year.

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To calculate how much VAT you owe HMRC, or how much they owe you, a VAT Return looks at:

  • Your total sales and purchases across a three-month 'accounting period'
  • The amount of VAT you owe for sales
  • The amount of VAT you can reclaim for purchases made by your business.

If you owe more VAT than you are able to reclaim, you will need to pay the difference to HMRC. If you can reclaim more VAT than the amount you owe, HMRC will refund the difference.

All VAT registered businesses must submit VAT Returns - even if there is no VAT to pay or reclaim. Businesses that are not VAT registered do not need to submit VAT Returns.

How do I complete a VAT Return?

VAT Returns are usually submitted on a quarterly basis, and businesses now are required to submit their VAT Returns online. HMRC has detailed and useful guide on how you should do this.

If you are part of the Annual Accounting VAT Scheme, you only need to submit a VAT Return once a year. You may need to follow a difference process if you use another VAT scheme.

VAT Returns and Debitoor

Overwhelmed by VAT? With Debitoor, reporting VAT is quick and hassle-free. With our more advanced price plans, Debitoor invoicing software creates an accurate and up-to-date VAT report in a matter of seconds, giving you a real-time calculation of the amount of much VAT you should pay or reclaim.