VAT returns reconciled to the bookkeeping, then filed.
Nine filings a year is nine chances to get it wrong. We reconcile the quarter before we file it, review the scheme once a year, and give you the payment figure with time to move the money.
- The quarter reconciled before it is filed
- Ratios reviewed the way HMRC reviews them
- Filed under MTD with digital links
- The payment figure a week ahead
- Your scheme reviewed once a year
A return that matches your records
VAT is the tax most likely to generate an assessment, because it is filed nine times more often than the accounts and every return is a chance to get something wrong. Most of the errors we see are the same handful: reclaiming on an invoice that is not addressed to the business, treating a deposit as outside the scope, missing the point at which the flat rate scheme stopped paying, and the ones that come from bookkeeping that was rushed to hit the deadline.
We reconcile before we file. The return agrees to the bookkeeping, the bookkeeping agrees to the bank, and anything that does not fit gets asked about rather than coded to a suspense account.
Every quarter, in the same order
- 1Bookkeeping brought up to date
The bookkeeping comes first. If the quarter is not clean the return is a guess.
- 2The return reviewed before it goes
We look at the ratios: input tax against purchases, output tax against sales, and anything that has moved sharply since last quarter. HMRC looks at exactly the same thing.
- 3Filed through MTD-compatible software
Digital records with a digital link all the way to the return, which is the part of Making Tax Digital that a spreadsheet copied by hand does not satisfy.
- 4The payment figure, with time to pay it
You know the number a week before it leaves the account.
- 5The scheme reviewed once a year
Flat rate, cash accounting, annual accounting, margin schemes. The right answer changes as the business changes, and nobody tells you when it has.
Four figures worth knowing by heart
Four numbers run a VAT year. The last one is the one nobody recalculates.
2026/27 figures. See key tax dates and the calculators for the full picture.
Five, and the first two are most of it
- The return is the bookkeeping
- A quarter rushed into shape the week the return is due is a quarter of guesses. The return should be the last step in a closed period, and a poor reason to finally close one.
- Reclaiming on the wrong evidence
- An invoice addressed to you personally, a receipt without a VAT number, a pro-forma. Each looks like a valid input and none of them is, and it is the first thing an officer asks to see.
- The scheme set once and never revisited
- Flat rate, cash accounting, annual accounting, margin schemes. The right answer moves as the business changes and nobody writes to tell you it has stopped being right.
- Deposits and stage payments
- A tax point is not always the invoice date. Deposits, stage payments and continuous supplies each have their own rule, and getting it wrong shifts VAT into the wrong quarter in both directions.
- Crossing the threshold without noticing
- The £90,000 test runs on any rolling twelve-month period, so your accounting year does not come into it. Cross it unknowingly and you owe VAT on sales you never charged it on, out of your own margin.
The same year, both ways
£120,000 of sales, a service business with few purchases
A consultancy on the flat rate scheme at the limited cost trader rate, with about £18,000 of VAT-bearing purchases in the year.
- Sales excluding VAT
- £120,000
- VAT charged to customers at 20%
- £24,000
- FLAT RATE — 16.5% of the gross £144,000
- £23,760
- STANDARD — output VAT less input VAT on £18,000 of purchases
- £21,000
- Input VAT given up by staying on the flat rate
- £3,000
- The flat rate scheme costs you
- £2,760 a year
The scheme was designed for businesses that buy things. The limited cost trader rules put most service businesses on 16.5%, at which point it is usually the more expensive option and stays that way until somebody sits down and recalculates it.
Worked through at 2026/27 rates from our own calculators, which follow gov.uk guidance checked in July 2026. An example. Your figures will differ.
When you have to, and when you might want to
Registration is compulsory once taxable turnover in any rolling twelve months passes £90,000, or if you expect to pass it in the next thirty days alone. The rolling test catches people out: it is not your financial year.
Voluntary registration below the threshold can be worth it if you sell mainly to VAT-registered businesses and buy a lot — you reclaim, and your customers do not care because they reclaim too. It is usually wrong if you sell to the public, because you have just made yourself a fifth more expensive.
If you are close to the threshold, that is a conversation worth having before you cross it rather than after. See the VAT registration guide.
What people ask about vat returns
When are VAT returns due?
One calendar month and seven days after the end of the VAT period, for both the return and the payment, unless you are on annual accounting or a payment-on-account arrangement. Direct debit collects three working days later.
What is the VAT registration threshold?
£90,000 of taxable turnover in any rolling twelve-month period. You must also register if you expect to exceed it in the next thirty days on its own.
Do I have to use software?
Yes. Making Tax Digital for VAT applies to every VAT-registered business regardless of turnover: digital records and a digital link through to the return. Typing figures from a spreadsheet into HMRC's website is not compliant.
Can you deal with a VAT inspection?
Yes. We handle the correspondence, prepare what the officer asks for and are there for the visit. The single thing that makes an inspection go well is records that reconcile, which is the argument for not leaving them to the last week each quarter.
What if I have made a mistake on an earlier return?
Errors under the reporting threshold can usually be adjusted on the next return; larger ones are disclosed separately. Disclosing before HMRC finds it materially reduces the penalty, and in some cases removes it.
