Does anyone do annual VAT returns?

(9 Posts)
Halsall Fri 12-Sep-14 20:23:00

Just that, really; I'm looking for advice. Won't go into boring explanations unless anyone responds, it's too dull otherwise!

Bit of background: I've been on the annual scheme for 2 years, just coming up to my second return. I'm also enrolled on the flat rate scheme (small business). With the annual scheme, HMRC takes money from you upfront throughout the year, then there's a balancing payment at the end - that's the bit I'm having trouble with. Last year was a complete muddle thanks to HMRC's lack of clear explanations.

Does anyone else have experience of the annual scheme?

OP’s posts: |
taxi4ballet Sat 13-Sep-14 00:50:59

Hate to say it, but you probably need an accountant to help you, at least for this year's return. They will check whether you are accounting for everything in the right way, and put you straight, so hopefully next year will be more straightforward and you can do it yourself. They will also check that HMRC have advised you correctly, or whether you would be better off on the standard scheme.

Halsall Sat 13-Sep-14 20:39:08

Thanks, taxi. I've got an accountant, I was planning to ask her, but just thought I'd try on trusty MN first!

I've been VAT-registered for years, confidently cope with the flat-rate scheme, so assumed I'd be OK with the annual return as it's much less work - I'd far rather do it all in one hit than quarterly.....but the guidance is so badly-worded.....nowhere does it tell you how they reconcile the advance payments that you've made throughout the year, and the few online instructions are spectacularly uninformative. They simply don't tell you that you need to do something in a certain way. In fact if anything their 'advice' strongly implies that you do the exact opposite. That's how I came unstuck last year, so I just wanted to double-check I had it right this time.

Anyway, yes, I'll ask my accountant - although she's already told me she steers clear of VAT if possible!

OP’s posts: |
MrsPnut Sat 13-Sep-14 20:42:50

Then you need a different accountant.

I am an accountant and I would advise you to register on either accountingweb or bookkeepers network (or both) and ask the question there. I am a management accountant and whilst I am confident with partial VAT and standard scheme VAT, I can't advise on your situation.

riksti Sat 13-Sep-14 20:50:24

From memory - the payments are calculated on your last year's liability unless you have a reason to expect the total to be significantly different to last year's. Then, within two months of your VAT year ending you need to get in your final VAT return and pay the balance. Or they'll give you a refund if you've overpaid.

The flat rate scheme requires you to account for your gross (i.e. VAT inclusive) turnover and calculate VAT on this based on the percentage appropriate for your business.

What are the issues you have with the return? I can try and explain further (if I know the answer, of course)

Halsall Sat 13-Sep-14 22:59:55

Thank you MrsP and riksti.

Essentially (sorry, boring bit alert), the guidelines, such as they are, say:

after calculating the annual VAT payment due, you deduct the interim payments you have already made to arrive at the end-of-year balancing payment due to you or HMRC.

Fine, seems clear enough...but I discovered last year - after doing precisely what they say above - that in fact, you don't deduct them. HMRC are supposed to do the balancing calculation, which is not how the above para reads to me.

You actually have to enter the whole amount you owe for the year (ie your calculated percentage based on flat rate turnover), regardless of the interim payments. According to a worryingly vague person I spoke to by phone at HMRC, she 'thought' that when you submitted this final calculation, you 'should' then get a final screen that deducts your interim payments and gives you the final figure to be paid by you (or by them, of course).

I just don't want to submit the return officially until I'm absolutely sure that final calculation will happen, because quite honestly the HMRC woman really didn't seem to be sure.

Hope all that makes sense...

OP’s posts: |
MrsPnut Sat 13-Sep-14 23:05:48

Completing your annual return and making your final payment are two different things. What the HMRC guidance says is you enter the whole amount that is due for the year into the calculator and then you pay them the difference between what you would owe for the year and what you have already paid.
But is still say ask on accountingweb and bookkeepers network to be certain.

Halsall Sat 13-Sep-14 23:12:26

That sounds a good bet, I'll go and take a look. Thanks again.

OP’s posts: |
Mesi Sat 20-Sep-14 16:41:33

Hi there. I do annual returns yes. My website is ariesaccountsconsulting.co.uk

Happy to help.

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