Preparing a VAT Return is a routine part of running many businesses, but it’s an area where simple mistakes can happen. Keeping accurate records and understanding your VAT responsibilities can help reduce errors and make submitting your returns much easier.
Here are five common VAT Return mistakes and how you can avoid them.
1. Leaving your bookkeeping until the last minute
One of the most common causes of VAT Return errors is leaving bookkeeping until just before the submission deadline.
Keeping your records up to date throughout the VAT period makes it much easier to prepare your return. Regularly recording sales, purchases and business expenses also gives you a clearer picture of how your business is performing.
2. Missing or incomplete records
To support the figures included on your VAT Return, you should keep accurate business records, including sales invoices, purchase invoices and receipts where appropriate.
Missing paperwork can make it difficult to complete your VAT Return accurately and may result in additional time being spent checking your records.
3. Claiming VAT that cannot be reclaimed
Not every purchase allows you to reclaim VAT. The rules depend on the type of expense and how it relates to your business.
If you’re unsure whether VAT can be reclaimed on a particular purchase, it’s worth checking the relevant HMRC guidance before including it on your VAT Return.
4. Forgetting to check your figures
Before submitting your VAT Return, take time to review the information you’ve entered.
Checking your figures against your bookkeeping records can help identify simple errors, such as duplicated transactions, missing invoices or incorrect amounts, before your return is submitted.
5. Missing the submission or payment deadline
Submitting your VAT Return and making any VAT payment by the deadline is an important part of meeting your VAT obligations.
Setting reminders and keeping your bookkeeping up to date throughout the quarter can help avoid unnecessary last-minute pressure.
Good bookkeeping makes VAT easier
Accurate bookkeeping isn’t just about preparing your VAT Return. Keeping organised financial records throughout the year helps you understand your business, makes it easier to find information when you need it and supports the preparation of your VAT Returns.
Spending a little time maintaining your records regularly is often much easier than trying to organise everything at the end of the VAT period.
Final thoughts
Most VAT Return mistakes are avoidable with good record keeping, regular bookkeeping and allowing enough time to prepare your return before the deadline.
If you’re ever unsure about your VAT responsibilities, it’s always advisable to refer to the latest HMRC guidance or seek professional advice.
Need help with your bookkeeping or VAT Returns?
At Mays Accounting Services, I provide professional bookkeeping and VAT Return services for small businesses across Birmingham and the surrounding areas. If you’d like support keeping your records organised or preparing your VAT Returns, I’d be happy to discuss how I can help.