VAT Returns

VAT returns & Making Tax Digital compliance

Complete VAT return preparation and submission for UK small businesses. All VAT schemes covered — so you stay compliant, reclaim everything you're entitled to, and never miss a deadline.

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Making Tax Digital for VAT

Making Tax Digital (MTD) for VAT requires all VAT-registered UK businesses to keep digital records and submit VAT returns using MTD-compatible software. This has applied to all VAT-registered businesses since November 2022 — there are no exemptions for most businesses.

If you're still submitting your VAT returns manually through your HMRC online account, you're likely non-compliant and could face penalties. MTD-compliant software — like Xero or QuickBooks — is now required by law.

At Taxbox Consulting, every VAT return we prepare is submitted digitally through HMRC's MTD system. We also ensure your bookkeeping records meet HMRC's digital record-keeping requirements, so you're fully protected if HMRC ever asks to see your records.

Important: MTD for Income Tax is coming. MTD for Income Tax Self Assessment (MTD ITSA) is being rolled out from April 2026 for businesses and landlords with income over £50,000. We can help you get ready.

VAT registration thresholds

Threshold	Level
Compulsory registration	£90,000 taxable turnover in 12 months
Voluntary registration	Any turnover level — can be beneficial
Deregistration threshold	£88,000 taxable turnover
Flat Rate Scheme limit	£150,000 taxable turnover
Cash Accounting limit	£1.35M taxable turnover
Annual Accounting limit	£1.35M taxable turnover

Thresholds correct as of 2025/26. Check HMRC for the latest figures.

VAT schemes explained

Choosing the right VAT scheme can save you money and reduce admin. We advise on the best option for your business.

Standard VAT Accounting

Account for VAT when you issue or receive an invoice. The most common scheme — straightforward and works for most businesses. Maximises input VAT recovery, no turnover limit.

Flat Rate Scheme

Pay a fixed percentage of gross turnover to HMRC instead of tracking VAT on every transaction. For turnover under £150,000/year — simpler record-keeping and potentially more tax-efficient.

Cash Accounting

Account for VAT only when payment is received or made — not when invoices are issued. For turnover under £1.35M/year — improves cash flow and no VAT on bad debts.

What's included in our VAT return service

A complete VAT compliance service — from preparation to submission and everything in between.

Quarterly VAT Preparation

Full preparation of your VAT return from your bookkeeping records — input VAT, output VAT, and net figures calculated correctly.

MTD-Compliant Submission

Your return filed digitally through HMRC's MTD system using Xero or QuickBooks — fully compliant with Making Tax Digital requirements.

VAT Scheme Advice

We review your VAT scheme and advise if a different scheme could save you money or simplify your reporting.

Input VAT Review

We check that you're claiming all input VAT you're entitled to on business expenses — maximising your reclaim.

HMRC Correspondence

We deal with any HMRC queries or notices about your VAT account on your behalf, keeping communications professional and on time.

VAT Registration Support

Not yet VAT-registered? We handle the registration process with HMRC and advise on the best scheme for your business.

Frequently asked questions

What is Making Tax Digital for VAT?

Making Tax Digital (MTD) for VAT is HMRC's requirement that all VAT-registered businesses keep digital records and submit their VAT returns using MTD-compatible software. MTD for VAT has applied to all VAT-registered businesses since November 2022. If you're VAT-registered and still submitting manually through your HMRC online account, you may already be non-compliant.

When do I need to register for VAT?

You must register for VAT when your taxable turnover exceeds £90,000 in any rolling 12-month period. You can also register voluntarily below this threshold — which can be beneficial if your customers are mainly VAT-registered businesses, as you can reclaim input VAT on your purchases.

How often do I need to submit a VAT return?

Most businesses submit VAT returns quarterly. However, some businesses submit monthly (particularly those who regularly receive VAT refunds) and some submit annually under the Annual Accounting Scheme. We prepare and submit your returns in line with your VAT period and HMRC deadlines.

What is the VAT flat rate scheme?

The VAT flat rate scheme is available to businesses with annual taxable turnover under £150,000. Instead of calculating VAT on each individual transaction, you pay a fixed percentage of your gross turnover to HMRC. The flat rate varies by business type and can sometimes be more tax-efficient — we can advise whether it's right for your business.

What is the difference between standard VAT and cash accounting?

Under standard VAT accounting, you account for VAT when you issue or receive an invoice — regardless of whether payment has been made. Under cash accounting, you account for VAT only when money changes hands. Cash accounting can help cash flow for businesses with slow-paying customers, as you don't pay VAT to HMRC until you've been paid.

What happens if I miss a VAT return deadline?

HMRC operates a points-based penalty system for late VAT returns and late payment. You receive a penalty point each time you miss a deadline, and once you reach a threshold (based on your filing frequency), a financial penalty of £200 applies — plus further penalties for continued failures. We ensure your returns are always submitted on time.

Never miss a VAT deadline again

Get in touch for a free, no-obligation quote on VAT return preparation and MTD-compliant submission tailored to your business.

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