Create and submit a VAT Return

If you’re registered for VAT, you need to submit a return to HMRC once a month or quarterly. You can create your return, check the values are correct and submit it to HMRC from within your Sage Business Cloud Accounting service.

Preparation

Before you start, make sure:

There are no waiting or failed VAT returns.

If you need help with a failed VAT submission, see our VAT submission errors article.

If required, you’ve registered with HMRC for Making Tax Digital (MTD).

If your taxable turnover is above £85,000.00 per year, you probably need to be registered for MTD. For help doing this in Accounting, see our Making Tax Digital (MTD) for VAT article.

You have the correct VAT number entered in Accounting.

You can check this in Settings > Accounting Dates & VAT.

Create your VAT Return

  1. Go to Reporting, More and then click VAT Returns.
  2. Select Create VAT Return.

    If you're using MTD for VAT and your authentication with HMRC has expired, a prompt appears on-screen. Before you can proceed any further with creating a VAT Return under MTD, you must Authenticate and follow the instructions to authenticate with HMRC again.
  3. If you need to, amend the From and To dates. Then click Calculate.

    If you’re set up for MTD, we automatically check for the next VAT period HMRC need you to submit and set the dates on the return for you.

  4. If you have any transactions dated before the VAT period that weren’t included on a previous return, a prompt appears on-screen.

    To check these transactions, click View prior period transactions.

    To include these transactions in this VAT return, click Yes or to discard them, click No.

    If you click No, you aren’t prompted to include these transactions again on future returns.

Edit your VAT Return

The figures in each box of the VAT Return are calculated automatically based on what transactions you’ve entered into Accounting, the dates of the transactions and the VAT scheme you’re using.

To adjust any values on a VAT return, click Adjust next to the relevant field. Enter the amount you want to change the value by and a reason for the change, then click Save.

You cannot adjust values for a VAT Return that has been submitted.

If you make an adjustment on the VAT return, to the VAT on Sales or Purchases, this posts either:

  • A journal to Credit Ledger 2202 (VAT Liability) and the opposite Debit on Ledger 9999 (Suspense).
  • A journal to Debit Ledger 2202 (VAT Liability) and the opposite Credit on Ledger 9999 (Suspense).

The value posted to Ledger 9999 can then be moved to the required ledger account manually using a journal. You may need to take advice from your Accountant as to where this needs to be posted.

Report on your VAT Return

  1. To check the transactions included in each box, select Detailed Report then click PDF.

    The report automatically downloads and when it’s ready you receive a notification on the menu bar. Select the report, which then opens in a new window or tab.

  2. To produce a PDF copy of the return, point to the Print drop-down, select PDF, then from your browser menu, choose to print or save it.

    To help with MTD compliance, if you need to send your VAT Return values to a CSV file, point to the Print drop-down, then select CSV.

Submit your VAT Return

Once you’re happy with your VAT Return, either:

Submit the return to HMRC now.

If you're registered for MTD, select Submit online to HMRC then click Save. When prompted, click Finalise and Submit to complete the submission.

If you're not registered for MTD you have 2 options:

  • Submit online to the Government Gateway – To submit your return straight to HMRC now, select this option. Check or enter your Government Gateway credentials. HMRC use these details to identify your company, so you must check they’re correct before continuing.
  • Submit to HMRC by other means – Select this option if you want to manually submit your VAT return to HMRC through their website .
Submit the return later. To do this, select Save this return and submit it later then click Save. You can then return later to submit it.
If you choose to submit the return now or later, the transactions included in the return are marked as VAT reconciled. Depending on the type of transactions, this may prevent you from editing or deleting them. You may need to post a transaction reversal instead.

You’ve successfully submitted your VAT return. You can view the status of the return from the VAT Return list. Once you’re ready to do so, you can record the HMRC payment or refund of VAT.

 

Related content

Recording VAT payments and refunds

VAT submission errors

Making Tax Digital (MTD) for VAT