Set up VAT

Before you enter any transactions, and to make sure your VAT calculates correctly on the VAT return, you must make sure your VAT is set up correctly.

This explains how to

  • Enter your VAT scheme and VAT registration number

  • Choose how often you submit VAT returns

  • Authorise Accounting Start to send VAT returns to HMRC

  • Set up defaults to reduce errors

  • Set up VAT for trading abroad

Enter your VAT scheme and registration number

  1. From More, , choose Business Settings, then Accounting Dates & VAT.

  2. In the VAT Details section, check or enter the following

    1. VAT scheme. Check you have selected the correct scheme. For Flat rate schemes, enter the Flat rate % supplied by HMRC.

    2. Submission frequency Choose how often you submit a VAT Return to HMRC. This depends on how you registered with HMRC.

    3. VAT number - Your VAT registration number.

    4. HMRC user ID - optional. You can store this here for your records.

  1. From More, , choose Business Settings, then Accounting Dates & VAT.

  2. In the VAT Details section, check or enter the following

    1. VAT scheme. Check you have selected the correct scheme. For Flat rate schemes, enter the Flat rate % supplied by HMRC.

    2. Submission frequency Choose how often you submit a VAT Return to HMRC. This depends on how you registered with HMRC.

    3. VAT number - Your VAT registration number.

    4. HMRC user ID - optional. You can store this here for your records.

Authorise for Making Tax Digital (MTD)

To submit VAT returns to HMRC. you must authorise Accounting Start. You will need to re-authorise every 18 months.

Before you start

  • Make sure the VAT scheme and VAT registration number are correct

  • Make sure existing VAT returns are up to date and shown as submitted

  • Delete any draft VAT returns

Authenticate with HMRC

To submit VAT returns for Making Tax Digital you must authorise Accounting Start to submit your VAT returns.

You will need your Government Gateway credentials to sign in to the Gateway as part of this process

  1. From More , choose Business Settings, then Accounting Dates & VAT.

  2. From the Making Tax Digital section, select Authenticate.

  3. Select I am signed up with HMRC for Making Tax Digital then select Authenticate. This takes you to the Gov.uk website.

  4. Select Continue when prompted, and sign in with your Government Gateway credentials.

    If you’re a VAT agent, enter your agent services account ID and password.

  5. When prompted, select Grant authority. You are returned to Accounting Start. When you see a confirmation message at the bottom of the page, that's it, you're done.

Read about setting up for Making Tax Digital

To submit VAT returns for Making Tax Digital you must authorise Accounting Start to submit your VAT returns.

You will need your Government Gateway credentials to sign in to the Gateway as part of this process

  1. From More , choose Business Settings, then Accounting Dates & VAT.

  2. From the Making Tax Digital section, select Authenticate.

  3. Select I am signed up with HMRC for Making Tax Digital then select Authenticate. This takes you to the Gov.uk website.

  4. Select Continue when prompted, and sign in with your Government Gateway credentials.

    If you’re a VAT agent, enter your agent services account ID and password.

  5. When prompted, select Grant authority. You are returned to Accounting Start. When you see a confirmation message at the bottom of the page, that's it, you're done.

Set up VAT defaults in Accounting Start

To make sure you're using the correct VAT rate, consider setting up default VAT rate for things you use often, like products and services or categories.

Set a default VAT rate on a product or service. For example, if you sell children's clothes, you may want to set the VAT rate to Zero rated.

When you enter transactions using these products or services, we use the VAT rate you set here. You can still change this if needed when entering an invoice or credit note.

  1. From Products, open the product or service from the list

  2. From the drop-down list, choose the correct VAT rate.

Set a default VAT rate on categories.

When you enter transactions and select this , we use the VAT rate you set here. You can still change this if needed.

  1. From More, choose Settings, then Business Settings, then Chart of Accounts.

  2. Open the from the list.

  3. From the drop-down list, choose the correct VAT rate.

Set up VAT for trading abroad

Sales to EU customers

This is an optional scheme to help you report and pay all EU VAT through a single return instead of having to register and pay VAT in each country you sell to. Read about EU VAT e-commerce rules

If you want to use this scheme, choose

  • Use destination VAT for sales to EU consumers

Postponed accounting

If you import goods from outside the UK , you can use Postponed Accounting.

With postponed accounting, you can declare and recover import VAT in the same VAT return. This is instead of paying import VAT on or soon after goods arrive and claiming it on your next VAT return.

The VAT is recorded as both a sale and purchase on your VAT return, effectively cancelling each other out.

If you want to sue postponed accounting for all you imports, you choose to set this be default. Choose

  • Use postponed accounting to deal with import VAT.

Read about postponed accounting

Related content

VAT return

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