VAT registered businesses must provide HM Revenue & Customs with regular summaries of VAT transactions in a specific period in the form of a VAT return.
VAT returns are submitted at the end of a ‘VAT period’ which are usually quarterly but some businesses can request for monthly or annual returns.
A VAT return provides HMRC with the following information:
- How much VAT a business has charged its customers during the period
- How much VAT a business can claim back on goods and services purchased during the period
- How much VAT a business must pay to HMRC (if VAT on sales is greater than on purchases) or how much HMRC must repay to the business (if VAT on purchases is greater than on sales)
- Total sales and purchases (excluding VAT) made during the period
- Total amount of goods or services sold to and purchased from businesses in the EU
For certain businesses and to help simplify matters there is a Flat Rate Scheme. Those businesses using this scheme apply a single percentage to its total flat rate turnover for the period with the resulting figure being the VAT payable.
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