VAT help

jefflemon

Hi,

Im filling in my first VAT return for the period 1st Nov - 31st Jan, just wondering, when does this need to be completed by? My VAT return has a due date of 07 Mar 2010 on it. Is this when the return needs to be done by or when the payment needs to reach them?

Also, can I reclaim VAT on purchases that I use to make stuff that is not liable for VAT?

Thanks

neilsedaka

The best method is to file your VAT return online on the HMRC website. You will need a Government Gateway ID and password if you don't already have one, so visit https://online.hmrc.gov.uk/login?GAREASONCODE=-1&GARESOURCEID=Common&GAURI=https://online.hmrc.gov.uk/home&Reason=-1&APPID=Common&URI=https://online.hmrc.gov.uk/home and click Register in the New User section. You get an extra 7 days if you file your VAT return online compared to on paper, so using your example the deadline to submit your return would be 1159 on 7th March. HMRC will automatically debit or credit your bank account a few days later. I think traders new to VAT have to file online anyway these days.

Yes, you can reclaim the VAT on purchases that are used to make zero-rated goods. An example would be reclaiming VAT on fertilizer that is used to grow wheat.

cottager

jefflemon wrote: »

Im filling in my first VAT return for the period 1st Nov - 31st Jan, just wondering, when does this need to be completed by? My VAT return has a due date of 07 Mar 2010 on it. Is this when the return needs to be done by or when the payment needs to reach them?

Both need to reach them by the due date. If both or either the return and the payment are late, you may be surcharged. Info here:
http://www.hmrc.gov.uk/VAT/managing/returns-accounts/deadlines.htm
http://www.hmrc.gov.uk/VAT/managing/problems/penalties.htm

I take it if your due date is confirmed as 7 March for this return you must be paying electronically? But completing/sending a paper return?

If you pay electronically you generally have an extra 7 days 'grace' to submit the return and pay, but if you aren't I was under the impression the due date was the end of the calendar month following the quarter in question (28 Feb in this case if your VAT quarter ends 31 Jan).

But if your return definitely specifies 7 March it sounds as if you've either said you'll pay electronically or HMRC requires you to (maybe as you're newly registered? -- I may not be quite up to speed with this as we've paid electronically for years so haven't needed to check). Again the page for info is:
http://www.hmrc.gov.uk/VAT/managing/returns-accounts/deadlines.htm
and also http://www.hmrc.gov.uk/payinghmrc/vat.htm

NB: 7 March is a Sunday this time so if you're sending a paper return HMRC must have this and the cleared payment by Friday 5th at the latest. This is also explained in the links above.
(28 Feb is also a Sunday if by chance your due date is then and not 7 March, so return/cleared payment required by Friday 26th.)

For the future...
If you receive and are completing paper returns at the moment that's fine, but be aware these are being phased out, and sooner or later you will be required to file online. More info:
http://www.hmrc.gov.uk/VAT/vat-online/moving.htm

Before you can do this you need to register with the VAT online service (Government Gateway). Details here:
http://www.hmrc.gov.uk/VAT/start/register/signup-online.htm
It takes a week or so for your registration to be confirmed, receive password etc, so when the times comes for you, be sure not to leave it till the last minute before your next return is due: register in good time.
If you weren't required to pay electronically before, once you file online you must.

Filing online is very straightforward, so even if you don't have to do so now, it's to be recommended in my view - saves worrying about possible postal delays etc, and you can also file on Sats/Suns. Print out the completed return for your records

jefflemon wrote: »

Also, can I reclaim VAT on purchases that I use to make stuff that is not liable for VAT?

Generally yes. This may help:
http://www.hmrc.gov.uk/VAT/managing/reclaiming/index.htm

For info, the index page listing all VAT help topics:
http://www.hmrc.gov.uk/VAT/index.htm

EDIT: ooops, NS got there first... I hadn't thought of DDs as we don't pay that way!

Estateprincess

Be careful when making the payment via BACS because, as I have just found out submitting my parents VAT return, the new bank accounts for HMRC are with Citi and are not part of the faster payment systems that most other banks use. This means that you need to send the payment via BACS 3 Days before the due date as it takes this long for them to receive it. Not that you'll find this information from them easily!

HTH

hethmar

If you do it by post it should be in their sticky hands by the last day of the month.

Electronically you get a bit longer but as pointed out, be careful, as I made the false assumption they would get my BACS in time and I got a wrist slap from them. Also if you do just send the money electronically be aware that your actual form also has to reach them on time - another thing I did wrong once. Assumed they would be happy receiving the dosh and took my time sending off the actual form - got told off for that too. After two times getting a slap they can fine you 10% of the amount due.

cottager

Yep, source of constant frustration!
HMRC had notices on their site for ages (from sometime in 2008 I believe) about 'hoping' to accept Faster Payments. It was never possible when they were with the Bank of England, but when they changed to Citi last year I thought great, that'll be sorted soon. But no. Now I see the wording's altered slightly to 'reviewing' it during 2010.
http://www.hmrc.gov.uk/payingHMRC/vat.htm#10
Not just VAT of course, but income tax, monthly PAYE etc... for some time now they have been the only people we have to pay regularly, out of a fairly long list, who don't accept FP.

theesel1994

hethmar wrote: »

After two times getting a slap they can fine you 10% of the amount due.

Not automatically though.
If you are late with two consecutive ones you COULD be hit with surcharge if you are late again in the next year - which would be 2% of the amount due. The next time it would be 5%. The time after it would be 10%. They will also not hit you with a surcharge if the amount of surcharge is less than £400 unless you have reached the 10% surcharge.

ukbill69

It says on top of the form when its due, usually 30 days after your period end.