When does a UK company have to pay a VAT bill?
Once you have registered for VAT, you have to submit a VAT return on either a monthly or quarterly basis. The vast majority of UK SME companies will submit their VAT return per quarter as opposed to monthly, purely from an administration perspective.
You can choose when you would like your VAT quarter to start and end. Most UK SME companies will run their VAT quarter in line with their financial year end.
HMRC then gives you one month and 7 days from your quarter end to submit your VAT return and pay your bill. You do not have to wait until the end of this time and many companies will submit and pay their bill earlier. For those companies looking to submit a VAT repayment, they often do their best to have the VAT return in as quick as possible.
Looking at the example of a December 31st quarter end, your key VAT dates are as follows:
Q1 January, February, March VAT return to be submitted by the 7th May
Q2 April, May, June VAT return to be submitted by the 7th August
Q3 July, August, September VAT return to be submitted by the 7th November
Q4 October, November, December VAT return to be submitted by the 7th February
I am VAT registered and have made no purchases or sales this quarter. Do we have to submit a VAT return?
Yes, you will need to submit a return regardless. However, please note, if your sales drop to under £85,000.00 in any 30 day period and this will be the norm, you could look to deregister for VAT.
How do we pay the VAT bill?
You will ether pay HMRC by bank transfer or alternately via direct debit. You could send a cheque or have a cheque paid into a bank, but you will need to ensure it is cleared in time.
Advice on HMRC VAT
For many UK companies, VAT is a relatively straight forward subject. However, it can quickly become complex when you take into account flat rate VAT, cash accounting scheme or annual accounting scheme. You then have different rates of VAT, standard, reduced and zero rates.
Add in Zero rated and VAT Exempt and what you can reclaim VAT on. For example entertainment costs is a no, so the whole subject becomes an area where you might need expert advice.
If ever in doubt, make sure you speak to an accountant.
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