VAT Returns
Services
You must register for VAT once your taxable turnover passes £90,000 in any rolling twelve months, or if you expect to pass it within the next thirty days. It is a rolling test, not a tax-year one, which catches people out. Once registered you charge VAT, reclaim it on purchases, and file returns digitally under Making Tax Digital.
VAT Returns — what it is and who needs it
You must register for VAT once your taxable turnover passes £90,000 in any rolling twelve months, or if you expect to pass it within the next thirty days. It is a rolling test, not a tax-year one, which catches people out. Once registered you charge VAT, reclaim it on purchases, and file returns digitally under Making Tax Digital.
The choice of scheme matters more than most businesses realise. Standard accounting means you account for VAT on invoice date, which can leave you paying HMRC for invoices your customers have not settled. Cash accounting, available under £1.35m turnover, means you only account for VAT when money actually moves — much kinder on cash flow if you are paid slowly.
Rates and exemptions are where the real errors live. Most goods and services are standard-rated at 20%, but there are reduced-rate and zero-rated categories, and construction work has its own domestic reverse charge rules that shift responsibility to the customer. Getting a rate wrong for a year is an expensive way to learn.
We also watch the direction of travel. If your turnover is approaching the threshold we will tell you early, because registration changes your pricing, your margins and your admin. For some businesses selling to the public, crossing the threshold effectively means a 20% price rise or a 20% margin cut — a decision worth making deliberately rather than discovering.
Who this is for
VAT-registered businesses of any size, and anyone approaching the £90,000 threshold who wants to plan for it.
Key facts & deadlines
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VAT registration threshold
£90,000 taxable turnover in a rolling 12-month period.
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Standard deadlines
1 month and 7 days after each VAT period ends.
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Penalties
New points-based penalty regime from Jan 2023. Late payment interest applies.
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MTD for VAT
Mandatory for all VAT-registered businesses. Requires compatible software.
Free consultation — no obligation
Everything included in our
VAT Returns service
Our all-inclusive service means no surprises — everything you need is handled by your dedicated accountant.
- Quarterly VAT return preparation and filing
- MTD-compatible digital record keeping
- Advice on the right VAT scheme for your business
- Flat rate, cash accounting and annual accounting reviews
- Domestic reverse charge handling for construction
- Checking rates applied to your products and services
- Registration and deregistration
- Support if HMRC opens a VAT enquiry
Who our VAT Returns
service is designed for
VAT-registered businesses of any size, and anyone approaching the £90,000 threshold who wants to plan for it.
Quick checklist
- Quarterly VAT return preparation and filing
- MTD-compatible digital record keeping
- Advice on the right VAT scheme for your business
- Flat rate, cash accounting and annual accounting reviews
- Domestic reverse charge handling for construction
- Checking rates applied to your products and services
- Registration and deregistration
- Support if HMRC opens a VAT enquiry
TAG Accountancy vs. going it alone
See exactly what you get when an expert handles your vat returns.
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Accountancy
How our VAT Returns service works
We keep it simple. No jargon, no chasing — just a reliable service that runs in the background.
Records in, digitally
Your bookkeeping feeds the return directly. No spreadsheets retyped, which MTD does not allow anyway.
We check before we file
Rates, reverse charge, partial exemption and anything that looks out of pattern against previous quarters.
Filed and confirmed
We file to HMRC and tell you the amount and date, so the direct debit is never a surprise.
Common VAT Returns questions — answered
Can't find the answer you need? Ask us directly →
When your taxable turnover exceeds £90,000 in any rolling twelve-month period, or when you expect to exceed it in the next thirty days alone. The rolling test is the one people miss — it is not measured against your accounting year or the tax year.
You must register within thirty days of the month in which you crossed the threshold. Registering late means paying the VAT you should have charged, whether or not you actually collected it from customers.
Sometimes. If your customers are VAT-registered businesses, they reclaim whatever you charge, so registering lets you recover VAT on your own costs at no real cost to them. If you sell mainly to the public, registering voluntarily means either raising prices by 20% or absorbing it.
The other consideration is admin: quarterly returns and digital records are an ongoing commitment. We will tell you honestly if it is not worth it yet.
Under the Flat Rate Scheme you charge customers the normal 20% but pay HMRC a lower fixed percentage of your gross turnover, keeping the difference. In exchange you generally cannot reclaim VAT on purchases apart from certain capital assets over £2,000.
It suits businesses with low costs relative to sales. If you buy a lot of standard-rated goods or services, ordinary VAT accounting is usually better. Watch out for the limited cost trader rate of 16.5%, which removes most of the benefit for service businesses with minimal purchases.
HMRC’s points-based system gives you a penalty point for each late return. Once you reach the threshold for your filing frequency — four points for quarterly returns — you get a £200 penalty, and a further £200 for every late return after that.
Late payment is separate and charged as a percentage of the tax outstanding, increasing the longer it goes unpaid, plus interest. Points do expire after a period of compliance, so getting back on track does eventually clear the slate.
Ready to simplify your
VAT Returns?
Join 250+ businesses who trust TAG Accountancy to handle it brilliantly. The first consultation is completely free.
Let's talk about
your business.
Whether you want to switch accountant, need help with a specific return, or just want to know how much you could be saving — get in touch. The first call is always free.
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