Once your company has been VAT registered, you must file an accurate Business VAT return every quarter. Failure to file or late filing can attract fines.
Value Added Tax (VAT) is charged on almost all goods and services. In some countries such as the United States, it is referred to as goods and services tax (GST). In the United Kingdom VAT and other taxes are handled by the Her Majesty’s Revenue and Customs (HMRC).
As the owner of a VAT registered business it is your obligation to keep the VAT records and file returns every quarter. The process can be very tedious and it is very easy for a layman to give inaccurate data. There are, however, automated systems that can help you process your VAT in a faster and more accurate manner.
To ensure that your VAT return has been processed, follow the right VAT procedure as follows:
Keep your records updated
You should ensure that your VAT records are accurate and up to date throughout the operation of your business. This makes it much easier to compile the data as the period for filing the VAT returns approaches.
At the end of the VAT period, you must update and compile all your business accounts including savings account, current account and business credit cards. You must finish your bookkeeping by the 15th date of the month following your business VAT return deadline.
Check here if you need more information on proper bookkeeping.
Confirm that the records are accurate
With the collaboration of your accounts manager, check to confirm that the VAT records you have entered are accurate. This is done online and once confirmed you can then file your returns. The confirmation of records is a very important step in the business VAT return process because you cannot file returns until the bookkeeping is completed and confirmed.
In other portions of this step, you can review the returns details and redo bookkeeping if you find an inaccuracy.
Filing the Business VAT Return and Payment
Once everything is in order you can then file your returns with the HMRC. An email will then be sent to you to confirm your submission and indicating the amount payable. You can then pay the due amount through the appropriate channels.
VAT Recovery
Depending on the local tax laws and regulations, a business entity can recover VAT that they have paid on domestic business expenses. Some of the expenses you can get a tax return on include food and restaurants, car rentals, and conferences.
The process is, however, exhausting and many companies choose to hire a specialist VAT recovery company.
Final word
The process of filing business VAT returns can be hard especially for business operators that are not familiar with accounts. To avoid the last minute rush and possibility of errors, it is advisable to keep your books all year around.
You may also choose to hire a company that specializes in the process of filing business tax returns. It is more efficient and less possibility of errors.