2. Fill in your return
Complete and send your VAT Return online.
If you need help there’s guidance on:
You must include EU sales on your VAT return and complete an EC Sales List.
Working out what you can claim
If your business is a charity, you pay VAT at a reduced rate on some goods and services.
VAT-registered businesses can usually reclaim the VAT they’ve paid on business purchases and expenses. The claim must be for a business activity (you have to work out the business element if it also had a personal use).
You must keep records to support your claim and show the VAT was paid.
You can’t reclaim the VAT on:
- entertainment expenses
- purchases if you use the VAT Flat Rate Scheme (except some capital assets worth more than £2,000)
There are special rules for working out how to reclaim VAT for:
- cars, eg buying, repairing, fuel costs
- staff travel expenses, eg accommodation and transport expenses
- businesses that are partly exempt from VAT
Ask HM Revenue and Customs (HMRC) for permission to use estimated figures. You’ll need a good reason why you can’t give accurate figures on your VAT Return.
If you’re allowed, you won’t be charged a penalty unless you miss the deadline or make a careless or deliberate error. You’ll normally have to give the correct figures in your next VAT Return.
You can reclaim the VAT you’ve paid HMRC but not received from a customer if it’s a ‘bad debt’ (one you’ve written off). To qualify for the relief:
- the debt must be between 6 months old and 4 years and 6 months old
- you mustn’t have sold the debt on
- you mustn’t have charged more than the normal price for the item
You should reclaim them via your VAT Return (add them to your Box 4 figure) and keep records about the debt.
If the debt is paid, you must pay the relief back via your VAT Return by adding the amount to your ‘Box 1’ figure.