VAT, or Value Added Tax, is a tax charged on most goods and services sold in the UK. Businesses collect VAT from customers and then pass it on to HMRC. But not all businesses need to charge VAT—only those who are VAT registered.

If your VAT-taxable turnover exceeds £90,000 (as of 2024), you must register for VAT. Even if you’re below the threshold, you can voluntarily register to claim back VAT on business purchases.

VAT returns are usually submitted quarterly. You typically have one calendar month and seven days after the end of each VAT period to submit your return and pay any VAT owed. Set reminders or use accounting tools to avoid missing these dates.

To register, go to the HMRC website and create a Government Gateway account. You'll need details like your business name, bank account, and turnover.

MTD requires VAT-registered businesses to keep digital records and submit VAT returns using compatible software. Sign up via your HMRC account and choose MTD-compliant software.

Keep records of all sales and purchases, VAT invoices, and receipts. These help you accurately calculate what you owe or can reclaim.

MTD requires you to store records digitally. Most accounting software automatically meets these standards, so you don’t have to worry about formatting or manual submissions.

Your VAT return will show the difference—if you’ve collected more VAT than you’ve paid, you pay the balance. If you’ve paid more, you get a refund.

You can submit returns directly through the HMRC portal, but only if you're exempt from MTD. For most businesses, you'll need to use software.

Cloud-based tools like QuickBooks, Xero, or FreeAgent make VAT filing a breeze. They sync with your bank, calculate VAT automatically, and submit returns with a click.

After submission, HMRC sends a confirmation. If you owe VAT, pay it by the deadline. If you’re due a refund, HMRC will usually pay it within 10 working days.

You can reclaim VAT on eligible business expenses. Ensure you have valid VAT invoices and receipts to support your claim. Use digital tools to track these efficiently.

You can pay via direct debit, bank transfer, or debit/credit card. Always pay on time to avoid penalties. Set up automated payments if possible to stay ahead.

This simplifies VAT for businesses with turnover under £150,000. You pay a fixed rate based on your industry, keeping the difference between what you charge and pay.

You only pay VAT when you get paid by customers—not when you invoice. Great for managing cash flow.

Submit only one VAT return per year, with advance payments throughout. Perfect for small businesses wanting less admin.

Miss a deadline or submit incorrect info and HMRC may fine you. Repeat offenses can lead to serious consequences, including audits.

Platforms like Payaxle help you manage payments, invoicing, and taxes. If you sell services online, staying VAT-compliant is easier when everything's automated.

Offering freelance services? Once you cross the VAT threshold, you’ll need to register and start filing. Track your income and expenses properly from day one.

If VAT is too complex, hire freelancers online with accounting expertise. You can find experienced VAT pros who'll handle everything remotely—saving you time and mistakes.

Doing a VAT return in the UK doesn’t have to be painful. Get organized, use the right tools, and don’t hesitate to ask for help. Whether you run a business or offer freelance services, following these steps will keep you compliant and stress-free.

1. Do I need to file a VAT return if I made no sales?

Yes! Even if you had zero sales, you must submit a VAT return for that period.

2. Can I do a VAT return manually?

Only if you're exempt from MTD. Most businesses must file digitally through approved software.

3. What if I miss the VAT return deadline?

You’ll face late submission penalties and possibly an interest charge on unpaid VAT.

4. Can freelancers register for VAT?

Absolutely. If your turnover crosses the threshold, you’re legally required to register.

5. Is it worth using an accountant for VAT?

Yes—especially if you find it confusing or want to avoid mistakes that could lead to penalties.