Filing VAT returns is a routine requirement for every VAT-registered business in the UK, but that doesn’t mean the process is always straightforward. From knowing what details to include, to meeting submission deadlines and keeping up with Making Tax Digital (MTD) rules, it can sometimes feel like a lot to manage each quarter.

Whether you’re new to VAT or simply want to double-check you’re on the right track, this guide covers the essentials: explaining what a VAT return is, how to submit one using MTD-compliant software, and when it might help to seek expert advice.

First up: what is VAT?

Value Added Tax (VAT) is a tax charged on most goods and services sold in the UK. If your business turns over more than £90,000 (the VAT threshold), you must register for VAT with HMRC. 

Once you’re registered, you will need to charge VAT on your sales, keep detailed VAT records and submit VAT returns every quarter (in most cases).

So, what is a VAT return?

A VAT return is a summary of the VAT you've charged and paid over a set period - usually quarterly. It tells HMRC:

• The total sales and purchases your business made
• The amount of VAT you charged on sales (that’s output VAT)
• The amount of VAT you paid on purchases (that’s input VAT)
• How much VAT you owe to HMRC, or how much you can reclaim

If you've charged more VAT than you’ve paid out, you’ll need to pay the difference to HMRC. If it’s the other way around, you might be eligible for a refund.

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You’ll need to submit a VAT return if:

• You’re VAT-registered (even if you have no VAT to report)
• You’re voluntarily registered for VAT
• You’ve been asked by HMRC to submit one

What is Making Tax Digital (MTD) for VAT?

Making Tax Digital is HMRC’s initiative to digitise the tax system. If you're VAT-registered, you’re legally required to follow MTD rules. That means:

• Keeping digital VAT records
• Using MTD-compatible software to file VAT returns

This applies to all VAT-registered businesses, no matter your turnover. So even if you’re under the VAT threshold but registered voluntarily, MTD still applies.

What information goes into a VAT return?

Here’s what you’ll need to include in your VAT return:

• Your total sales and purchases for the period
• The amount of VAT you owe
• The amount of VAT you can reclaim
• What your VAT refund from HMRC is (if applicable)

You’ll need to keep digital records of all sales and expenses with VAT applied, and categorise them correctly in your accounting software.

How to submit a VAT return via MTD

Here’s how the submission process works under MTD:

1. Get MTD-compatible software

The first step is to choose MTD-compliant accounting software, like Crunch. This software connects directly to HMRC and lets you:

• Keep digital VAT records
• Automatically calculate your VAT
• File your return directly with HMRC

2. Link your software to HMRC

Once you’ve signed up for MTD, you’ll need to authorise your software to connect with your HMRC account. This lets your software submit returns on your behalf.

3. Check you’ve logged all sales and purchases correctly

Before you file, double-check that all sales and purchases have been logged properly. Make sure VAT has been applied wherever needed, and that you’ve worked out your expenses properly.

4. Submit your VAT return

Once everything’s ready, you can then submit your VAT return directly through your software. You’ll get email confirmation from HMRC once it’s received.

5. Pay any VAT due

After submitting, you’ll see your VAT bill (or refund). If you owe HMRC, make your payment by the due date to avoid penalties.

Common VAT return mistakes to avoid

VAT returns don’t have to be stressful, but here are a few things to watch out for: 

• Missing deadlines: VAT returns are usually due every quarter, 1 month and 7 days after the end of the period.
• Incorrect VAT rates: Double-check if your goods or services are standard-rated (20%), reduced-rated (5%) or zero-rated (0%).
• Claiming VAT on ineligible expenses: Not all expenses are VAT-deductible, so make sure you’re claiming correctly.
• Not registering for MTD: You must use MTD-compliant software. Submitting VAT returns manually via the HMRC portal isn’t allowed any more.

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How an accountant can help

Submitting your VAT return properly can get complicated - especially if you're juggling multiple revenue streams, overseas transactions or just trying to stay compliant without spending hours on admin. A good online accountant (like one of our friendly tax and VAT experts at Crunch) can help you:

• Set up MTD-compliant software
• Keep accurate digital records
• Ensure VAT is correctly applied to sales and purchases
• Submit returns on time, every time
• Handle any communication with HMRC

We’ll even help you spot where you can save money by reclaiming VAT on eligible expenses.

MTD made easy

Submitting your VAT return through MTD may seem daunting at first, but the good news is that the process is now largely automated—reducing errors and freeing up more of your time to focus on running your business.

Ultimately, if you’re VAT-registered, filing your return on time with MTD-compliant software is a must. And if you need a helping hand to get started, Crunch is here to support you every step of the way.

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