Create and submit a VAT return
This explains how to create your VAT return, check the return is correct and submit it to HMRC from Sage Accounting.
You need to send VAT returns regularly to HMRC from your Sage Accounting. This could be once a month, quarterly or once a year.
Once you submit a VAT Return, you cannot make any changes. If you need to make adjustments, you must do this on the next VAT Return.
Before you start
Before you start, make sure you:
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Enter your VAT registration number from Settings, then Business Settings, then Accounting Dates & VAT.
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Authorise Sage Accounting with HMRC to submit VAT returns. Do this from Settings, then Business Settings, then Accounting Dates & VAT.
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Submit or delete any draft VAT Returns
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Resubmit any failed VAT Returns.
- From Reporting, , select VAT Returns.
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Select Create VAT Return.
We automatically check for the next VAT period and set the dates on the return for you.
If you can change the From and To dates, you have not yet authorised your software with HMRC. Unless you are exempt from MTD, you must do this before submitting your VAT return.
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Choose Calculate.
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If you have any transactions dated before the VAT period that weren’t included on a previous return, a prompt appears on-screen.
To check these transactions, select View Previous Transactions.
Choose whether to include them on your VAT Return…
Now - Include them on this return.
Later - Ask me again when I run my next return.
Never - Exclude them from all future returns. Choose this if the transactions have already been submitted to HMRC. This could be from a return submitted from a different system.
The figures in each box of the VAT Return calculate automatically based on the transactions entered in Sage Accounting, the VAT scheme you are using, and the dates of the transactions.
Once a transaction is included on a VAT return, you can only change the ledger account and reference. Read more about correcting VAT transactions.
Why and when to make adjustments
Under MTD, you must keep digital records of your transactions and include these on your VAT return.
HMRC do allow you to make some adjustments outside your software for particular reasons. This can be for partial exemptions, or other calculations you need to do on spreadsheet such as the capital goods scheme. For more information go to Gov.uk VAT notice 70022
You will also needs to enter adjustments if you have accidentally submitted a VAT return without using the MTD option. Find out how to Resubmit a rejected VAT return.
How to make adjustments
Enter the amount you want to change the value by and a reason for the change, then click Save.
Impact of adjustments
If you make an adjustment on the VAT return to the VAT on Sales or Purchases, this updates the following ledger accounts
| |
Debit |
Credit |
| Sales |
9999 (Suspense) |
2202 (VAT Liability) |
| Purchases |
2202 (VAT Liability) |
9999 (Suspense) |
You can move the value posted to Ledger 9999 to the required ledger account using a manual journal. You may need to take advice from your Accountant if you're unsure how to do this.
Detailed Report
To check the transactions included in each box of the return, export the Detailed Report as either a PDF or CSV.
This show a list of all the transactions that make up the total for each box on the VAT return.
Print the VAT Return
This allows you to create a copy of the VAT return to keep for your records. Choose to from a PDF or CSV version.
If you're not yet ready to submit the VAT return, choose Save this return and submit it later.
This saves the VAT return as a Draft and displays on the VAT Return List.We still flag all the transactions to show they are included on a VAT Return. This prevents you editing or deleting them.
Just delete the draft VAT return, to edit or delete these transactions.
You can only delete a draft VAT return. Once you submit a VAT return to HMRC, you cannot delete it.
If you have made an error, reverse the original transaction and re-enter it. This then updates on you next VAT return. Read more about correcting VAT transactions.
To delete your draft VAT Return:
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From Reporting, , select VAT Returns
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In the VAT Returns list, find the VAt return with Draft in the Status column.
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Select the bin icon on the left of the row. When prompted, choose Yes to Are you sure you wish to delete this VAT Return?
Once you're ready to send your VAT Return to HMRC.
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Select Submit online to HMRC.
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Choose Save.
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When prompted, choose Finalise, then Submit to complete the submission.
We send your VAT return directly to HMRC.
Unless you are exempt from Making Tax Digital (MTD), do not choose Submit to HMRC by other means. If you have done this in error, find out how to Resubmit a rejected VAT return.
Businesses exempt from MTD
A very small number of businesses are exempt from the MTD rules.
If your business is exempt,
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Choose Submit to HMRC by other means.
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Print the VAT return. Use the figures on the printed VAT return to send to HMRC another way.
Businesses exempt from MTD
These are businesses where HMRC is satisfied that you meet one of the following criteria (outlined in HMRC VAT Notice 700/22: Making Tax Digital for VAT).
- Your business is run entirely by practising members of a religious society whose beliefs are incompatible with the requirements of the regulations (for example, those religious beliefs prevent them from using computers).
- It is not reasonably practicable for you to use digital tools to keep your business records or submit your returns. This may be for reasons of age, disability, remoteness of location or for any other reason.
- You’re subject to an insolvency procedure.
HMRC will decide if you meet exemption criteria. To avoid potential penalties you must check with them directly and don’t just assume you meet the criteria.
What's next
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Check the status of the return from the VAT Return list.
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Once you’re ready to do so, record VAT payments or refunds.
Read more about how to record VAT payments or refunds.
