VAT Returns

VAT Returns

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How often are UK VAT returns required?

In the UK, VAT returns can be submitted either monthly or quarterly. Most returns are completed on a quarterly basis; however, if a business has an annual VAT liability of over GBP2.3 million payments must be made on account on the last day of the second and third month of every VAT quarter.

Once registered, a business will be assigned to a “VAT stagger group”. The group assigned will determine the month in which VAT quarters end and when payments and VAT returns are due for submission. The three stagger groups are as follows:

Stagger group 1 - quarters ending March, June, September, December

Stagger group 2 - quarters ending April, July, October, January

Stagger group 3 - quarters ending May, August, November, February

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What UK VAT can be deducted?

In addition to declaring sales or output VAT in the UK return, companies can offset this by the corresponding input or purchase VAT. There are some exceptions, including:

Goods and services obtained prior to registration
Cars ( except when used wholly for business purposes)
Business entertainment expenses (except expenses relating to overseas customers)
Goods and services not used for business purposes

Excess input VAT is submitted in the VAT return for the period. Subject to any investigations taking place, HMRC will normally make a payment within 30 days of a return being submitted.