Introduction to this document

VAT return checklist

Making a mistake on your VAT return will result in under or overpaying VAT. This might mean losing out on VAT you can reclaim or underpaying which can result in financial penalties. Our VAT return checklist can help you reduce errors.

What to put on your VAT return

The principle of VAT is that a business adds its output tax to its sales. If it sells to another VAT-registered business, that business may claim relief for tax it has paid on its purchases and expenses (its input tax) against its own output tax. There are also different rates for different items, and a distinction between zero-rated items and exempt items.

Input tax

The basic principle of claiming input tax is that you may claim for items that can be attributed, either directly or indirectly, to the taxable supplies you make. Generally, you can claim back input tax on business items. This may seem an obvious point but you would be surprised at the number of people who try to claim back VAT on private items. Plus, certain items are specifically excluded for the purposes of claiming input tax, such as VAT on cars, entertaining, and directors’ accommodation.

Output tax

For output tax, difficulties sometimes arise in deciding what is the correct rate of tax, and what constitutes a taxable supply. Then there is a problem with cars again. If you claim input tax relief on fuel for cars, and you have any private use during the VAT period, then you must usually add a scale charge to your output VAT on your VAT return (unless you make a charge for private use of fuel when you can pay VAT on the reimbursed amount instead).

Our VAT Return Checklist is a box-by-box guide to what figures need to appear where on your returns.