Create a VAT Return
If you’re registered for VAT, you need to submit a return to HMRC once a month or quarterly. You can create your return, check the values are correct and submit it to HMRC in just a few clicks.
If you haven’t already done so, you must register with HMRC for online filing. For more information, please visit https://www.gov.uk/log-in-register-hmrc-online-services
Once you’ve registered and activated your details with HMRC, you can then submit your VAT returns through Accounting.
- 1. Go to More, then click VAT Returns.
- 2. Click Create VAT Return.
- 3. If you need to, amend the From and To dates. Then click Calculate.
- 4. If you have any transactions dated before this period that weren’t included on a previous return, to include them, click Yes or to discard them, click No.
To view these transactions, click View prior period transactions. If you click No, you aren’t prompted to include these transactions again on future returns.
- 5. To adjust any values, click Adjust. Enter the amount you want to change the value by and a reason for the change, then click Save.
If you make an adjustment on the VAT return, to the VAT on Sales or Purchases then this will post a journal to create either a Debit or Credit on Ledger 2202 (VAT Liability) and the opposite Debit or Credit on Ledger 9999 (Suspense). Sage uses Ledger 9999 by default, to balance the opposite side of the Double Entry and therefore the Trial Balance Report. This value can then be moved to the required ledger account manually by means of a Journal. You may need to take advice from your Accountant as to where this needs to be posted.
- 6. To check the transactions included in each box, click Detailed Report then click PDF.
The report automatically downloads and when it’s ready you receive a notification on the menu bar. Click the report, which then opens in a new window or tab,
- 7. To produce a PDF copy of the return, click Print then from your browser menu, choose to print or save it.
- 8. Once you’re happy the values are correct, select one of the following options:
- Submit online to the Government Gateway – To submit your return straight to HMRC now, select this option. Check or enter your Government Gateway credentials. HMRC use these details to identify your company, so you must check they’re correct before continuing.
- Submit to HMRC by other means – Select this option if you want to manually submit your VAT Return to HMRC through their website .
- Save this return and submit it later – If you don’t want to complete the VAT Return just yet, select this option. You can then return to it at a later time to submit it.
If you choose to save the return for later, the transactions included in this return are marked as VAT reconciled and you can make limited changes to them.
- 9. Click Save.
You’ve successfully created your VAT Return. You can view the status of the return from the VAT Return list. Once you’re ready to do so, you can record payment or refund of VAT from HMRC as appropriate.
If for any reason your submission to HMRC wasn’t successful, from the VAT Return list, click the relevant return and the reason for the submission failing appears on the right-hand side. You should fix the error and try submitting again.
The most common reason for a VAT Return failing to submit is error code 1046 Authentication failure. This is because HMRC can’t recognise the credentials you used to submit your return. If this is the case, select Submit online to the Government Gateway, enter the correct details, then try submitting again.