A quick summary on VAT returns….
Author: Russell SmithSeptember 12, 2015
VAT returns are usually quarterly (although you can opt to do them annually).
The quarter ends depends on when you first become VAT registered. Your first VAT return can be slightly random e.g. it could be one month or five months! After the first VAT return it will be every three months.
It is well worth syncing up your quarterly VAT return quarter ends with your limited company year end since this makes the accounts much easier. The original VAT return quarters set by HMRC can be changed.
The deadline is one month and 7 days after the quarter end i.e. if your quarter end is 31 March, then your VAT return has to be submitted by 7 May. Payment also has to be made by this date although if you set up a direct debit with HMRC you are able to get a few more days credit.
Most people in business are a bit intimidated by the VAT department as they have heard horror stories of severe fines and crackdowns.
Unfortunately these stories are often true as the VAT return penalties are even worse than the Companies House and Personal tax return penalties.
HMRC can charge you for late filing and late payment of VAT amounts.
They apply %s of the outstanding amount and these escalate if you are late more than once. As you can see from the table below it can end up costing lots of money.
The first thing to do if you know you are struggling to pay your VAT bill is to speak to your accountant as there are always option about what to do (e.g. payment plans, changing the way you account for VAT).