VAT Returns

VAT returns are a core compliance requirement for VAT-registered businesses in the UK. At Reaveley Cooper Accountants, we provide expert guidance and hands-on support to help you understand, prepare, and submit your VAT returns accurately and on time—ensuring your business stays compliant with HMRC’s latest rules and avoids costly penalties.

Who Needs to Register for VAT?

As of 2025, businesses must register for VAT if their taxable turnover exceeds £90,000 in a rolling 12-month period. This threshold is reviewed annually and has increased from previous years, offering more flexibility for smaller businesses. Voluntary registration is also possible, and can be advantageous if your clients are mostly VAT-registered or you expect to exceed the threshold soon.

VAT Return Deadlines and Frequency

Most businesses submit VAT returns quarterly, though some may file monthly if they have a high turnover. Each VAT return must be submitted online using HMRC’s Making Tax Digital (MTD) system. The standard deadline is one month and seven days after the end of your VAT period. Payments must also be made by this deadline to avoid penalties.

Making Tax Digital (MTD) for VAT: 2025 Updates

From April 2025, all VAT-registered businesses, regardless of turnover, must comply with Making Tax Digital (MTD) rules. This means:

• All VAT-related records must be kept digitally; paper records are no longer accepted.

• VAT returns must be filed using HMRC-approved, MTD-compatible software.

• Each sale and purchase must be recorded digitally, and manual submissions are no longer allowed.

• Businesses must retain digital records for at least six years for HMRC compliance checks.

What’s Included in a VAT Return?

Your VAT return must detail:

• Output VAT: VAT charged on your sales.

• Input VAT: VAT paid on your purchases.

• Net VAT: The difference between output and input VAT, which you either pay to HMRC or reclaim.

Accurate and up-to-date record-keeping is essential for error-free VAT returns and to support any claims in the event of an HMRC review.

Final VAT Returns and Deregistration

If your business deregisters for VAT (for example, if turnover drops below £88,000 or you cease trading), you must submit a final VAT return. As of June 2025, HMRC has clarified that you have one month and seven days from the date the final return is made available to submit it, and HMRC now has the power to extend this deadline in certain circumstances.

Consequences of Non-Compliance

Failure to register, submit, or pay VAT on time can lead to penalties, interest charges, and increased scrutiny from HMRC. With the introduction of stricter digital reporting and new penalty regimes, timely and accurate VAT management is more important than ever.

How Reaveley Cooper Accountants Can Help

Our VAT services include:

• Assessing your VAT obligations and handling registration or deregistration

• Advising on the best VAT schemes for your business

• Ensuring full MTD compliance with digital record-keeping and submissions

• Preparing and submitting accurate VAT returns on your behalf

• Providing ongoing support and advice to minimise VAT liabilities and avoid penalties

Stay Compliant and Confident with Your VAT Returns

Let Reaveley Cooper Accountants take the stress out of VAT compliance. We help you navigate the latest HMRC rules, keep your records digital and up to date, and submit your VAT returns accurately and on time, so you can focus on growing your business.