VAT Returns

Two male employees examing VAT returns from a business using a digital tablet

What Value Do You Get When We Prepare Your VAT Return?

Many software companies make it sound like filing a VAT return is just a matter of pressing a button. This statement is, at best, misleading. And it’s guaranteed to send your accountant into a fuming rant.

It’s what we do before and after we press that button that makes the difference. It’s also the reason why you should not do your own VAT returns.

Here’s What We Do Every Time We Prepare a VAT Return

  1. We check that you’re using the best basis or scheme for your business. There are also rules and thresholds for cash or accruals basis and the flat rate scheme, for example.
  2. We check the high-risk expense codes like entertainment. Here, the rules for what you can and can’t claim can be complex and subjective. Our team has experience to know what HMRC will and won’t accept.
  3. We use Xero’s powerful tools like the excellent ‘Find and Recode’ functionality to check the non-standard VAT rates. For example, exempt income or reverse charge expenses.
  4. We review a risk-based sample of the standard 20% coded transactions.
  5. We take a step back and look at the big picture – do your numbers make sense? We compare ratios from this quarter’s return with the same quarter last year and returns from the last 12 months. It is too easy to get lost in the detail and lose sight of ‘common sense’.
  6. We check whether corrections to previous returns can be included on the return, based on the 5-way rule set out by HMRC. Or if they need to be reported on a VAT652 form.
  7. We make sure that the VAT owed in your accounts matches the amount payable on your VAT return. And if it doesn’t match, we make sure that there is a good reason for it.

If you honestly think that you have the technical know-how to do all of that, please apply for a job. We’d love to have you at Composure.

This is all before we send you the return to be approved (which is a legal requirement). If you’d like to talk about any part of your return before approving it, we’ll always make time for you.

Meeting Deadlines

We aim to start work on your return within a maximum of 14 days after your quarter end. And we aim to file your return 2 weeks before the deadline. That gives you plenty of notice and removes the risk of late filing and payment penalties.

Once we’ve ‘hit the button’ and filed your return, we’ll send you confirmation and instructions on how to pay HMRC. We recommend setting up a direct debit to all our clients. If you have one in place, we’ll remind you, so you don’t pay it twice and so that you’ll have the money in the right place when the DD clears. We’ll also deal directly with HMRC on your behalf with regards to any tax administration like filing or payment issues.

What Are the Consequences of Getting Your VAT Wrong?

As a child, I remember my dad (also an accountant) always saying “never mess with the VAT man”. He was right then and he’s not wrong now. Mistakes on your return are costly — HMRC don’t see the fact that you did it yourself as a valid excuse.

The number of HMRC inspections is on the rise. The single biggest tax that we have seen this in is VAT and there’s a good reason for that. It’s where the most mistakes are made, so it’s where HMRC can easily generate repayments and penalties.

VAT enquiries are time-consuming. The cost to your business won’t just be the value of any errors. There is also the cost of business disruption and your personal wellbeing.

One last thing… your accountant will prepare your VAT return rather than your bookkeeper. That extra layer of review means a fresh pair of trained eyes catches anything that might otherwise be missed.

We don’t treat VAT returns as box-ticking exercises. Or button pushing. We’ll make sure it’s set up properly, reviewed thoroughly, and filed on time — every time.

VAT Returns in Horsham

Based in Coolham, just outside Horsham, we file VAT returns for our clients throughout the Horsham District. In fact, our clients are located throughout West Sussex and the surrounding counties. So, if you’re starting a new business or not sure if you should be VAT registered, then get in touch. If you are doing your own VAT returns, then you should definitely contact us! Call us today on 01403 780858, send us an email or fill in our form.