VAT Return - What is a VAT Return ?
Definition: A VAT return shows how much VAT is due on Sales (output VAT) and how much VAT can be reclaimed on Purchases (input VAT) dictating how much is then paid or reclaimed from HMRC for a given period.
Any company that has a turnover of the current threshold of £77k will need to contact HMRC with the view to be VAT registered and complete a VAT return and file online with HMRC.
VAT Returns are normally completed every quarter, but can be annually depending on your agreement with HMRC.
Filling out a VAT Return
The VAT Return compiles of 9 boxes, each containing information about your sales and purchases. In essence these boxes need to contain the following information:
Box 1 – VAT recorded on your sales invoices
Box 2 – VAT due on acquisitions from EU countries
Box 3 – Total of boxes 1 and 2
Box 4 – VAT recorded on your purchases + VAT due on acquisitions
Box 5 – Box 3 less box 4 (if the box 3 is greater than box 4 you pay HMRC if box 4 is greater than box 3 they pay you)
Box 6 – your total sales excluding VAT
Box 7 – your total purchases excluding VAT
Box 8 – total value of goods you sold to EU countries
Box 9 – total value of good you bought from EU countries
For further information please check the HMRC website.