How to fill out a VAT Return: Step by step guide

VAT returns are submitted to HM Revenue and Customs (HMRC) usually every 3 months – this period is known as your ‘accounting period’. When you fill out a VAT return, it records data such as your total sales and purchases, and the amount of VAT you owe to HMRC and can reclaim from them. VAT returns must be submitted even if you have no VAT to pay or reclaim (this is called a ‘nil return’).

The UK’s exit from the EU has seen the biggest change to UK VAT since its inception in 1973.

But what changes, if any, have been made to the VAT return?  Here we explain what needs to be included when you fill out a VAT return, box by box.

Box 1: VAT due in the period on sales and other outputs

Here you include VAT due on all good and services you have supplied in the period covered by the return. This is your ‘output VAT’ for the period.

If you use Postponed Import VAT Accounting (‘PIVA’) you will need to declare the output tax element here.  Similarly, VAT due under reverse charges should be accounted for in Box 1 (services received from suppliers outside of the UK, or work received under the domestic reverse charge for construction services (‘DRC’) for instance)

VAT may also be due on other items supplies outside your normal business activities. This could include:

• The sale of stock and assets
• Goods you take out of the business for private use
• Supplies to your staff, or business gifts
• Fuel scale charges

Box 2: VAT due in the period on acquisitions of goods in Northern Ireland from EU member states

In a change to pre-Brexit VAT reporting, from 1 January 2021, you should only complete Box 2 if you receive goods in Northern Ireland which have come from the EU.

If you are required to complete Box 2, you should show the VAT due on all goods and related costs bought from VAT-registered suppliers in EU member states.

You must include the VAT due on anything you acquire for the VAT period in which the tax point occurs. The tax point is the earlier of:

• The date your supplier issued you with the invoice
• The 15th day of the month following the day the goods were sent to you

Box 3: Total VAT due

This is the total VAT due, i.e. boxes 1 and 2 added together. This is your output VAT for the period.

Box 4: VAT reclaimed in the period on purchases and other inputs (including acquisitions from the EU)

This is where you show the total amount of deductible VAT charged on your business purchases, this is referred to as your ‘input VAT’ for the period.   For businesses which cannot recover all of the VAT they incur, you should only show the amount of VAT you are able to recover.

You should include the recoverable element of PIVA, DRC and services received from outside of the EU in this Box as well as:

• VAT incurred on business expenses
• VAT on capital items
• Recoverable VAT on staff entertaining
• VAT claimed under Bad Debt Relief provisions
• Import VAT declared on C79 statements from HMRC

You cannot claim input VAT on your return unless you have a valid VAT invoice (or other commercial documentation) to support the claim.

Box 5: Net VAT to pay to HMRC or reclaim

Box 5 is the amount of VAT due to HMRC (Box 3) less the amount of VAT recoverable (Box 4)

If the figure in box 3 is larger than the figure in box 4, the difference is the amount you owe to HMRC. Otherwise, your VAT account will be credited and the balance will be repaid (subject to any enquiries by HMRC).

Box 6: Total Value of Sales and all other outputs excluding any VAT

This is the total value of all your business sales and other specific outputs excluding VAT. Some examples are:

• Zero rate, reduced rate and exempt supplies
• Fuel scale charges (net amount)
• Supplies to staff
• Business gifts
• Exports of goods
• Services to customers outside of the UK

This does not include loans, dividends, wages, gifts of money or insurance claims.

Box 7: Total value of purchases and all other inputs excluding VAT

This is the total value of your purchases and expenses excluding VAT. You must include the value of:

• Purchases of goods and services
• Capital assets
• Imports
• Acquisitions of goods you bring into Northern Ireland from EU member states (any figure entered in box 9)
• ‘Reverse charge’ transactions (net amounts)

Box 8: Total Value of all supplies of goods and related costs, excluding VAT, from Northern Ireland to EU member states (from January 2021)

In another change from pre-Brexit era, it’s no longer necessary to shows the total value of all supplies of goods to/from EU member states in Box 8 and 9 unless the goods are sold to or from Northern Ireland.

If you are required to complete this Box, this must include the value of any goods dispatched from Northern Ireland to a destination in an EU member state, even if no actual sale is involved or the sale is being invoiced to a person located outside the EU.

This could include the value of supplies of any goods dispatched from Northern Ireland to or for installation or assembly in an EU member state.

Box 9: Total value of all acquisitions of goods and related costs, excluding any VAT, from EU member states

In another change from pre-Brexit era, it’s no longer necessary to shows the total value of all supplies of goods to/from EU member states in Box 8 and 9 unless the goods are sold to or from Northern Ireland.

Box 9 shows the total value of all acquisitions of goods from VAT-registered suppliers in EU member states and directly related costs excluding VAT. You must include the value of supplies such as:

• Acquisitions made within the return period in which the tax point occurs
• Goods installed or assembled in Northern Ireland where those goods have been dispatched from an EU member state

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