When it comes to submitting your business’s quarterly VAT Returns, there’s lots to consider. As explained in our recent article, MTD bridging software for Excel can make submitting your VAT Return a super simple process. Rather than needing to share the entirety of your business’s bookkeeping with a third party, bridging software such as AbraTax requires only minimal input. In fact, you only need to link nine pieces of data with HMRC’s system – and two of these are automatically calculated for you through our bridging template! In this article, we outline exactly what data you will be submitting to meet your tax obligations.
Box 1: “VAT due in the period on sales and other outputs”
The first digital link to connect from your business’s records is simple: the VAT due on all goods and services you have supplied in the relevant period. This includes the sum of VAT on taxable sales and can also include other taxable outputs such as:
- Business supplies for your staff
- Goods (worth more than £50) given as gifts
- Commission received for selling on behalf of a third party
Make sure to check any further details on the HMRC website for other potential VAT liabilities.
Box 2: “VAT due in the period on acquisitions of goods made in Northern Ireland from EU member states”
The second box is pretty self-explanatory from the title, and since January 2021 (following Brexit) it applies only to acquisitions of goods conducted in Northern Ireland. In layman’s terms, this refers to scenarios such as when you become the new owner of goods brought into Northern Ireland from the EU (including the Republic of Ireland). Since these goods originated outside the UK’s own economic zone, you are expected to declare the VAT due to HMRC, as applicable.
Box 3: “Total VAT due”
This piece of data is simple but essential. It represents your business’s “output VAT” for the period at hand. In short, it is the sum of boxes 1 and 2. When submitting your VAT Return through our bridging software, this figure will be calculated automatically for you.
Box 4: “VAT reclaimed in the period on purchases and other inputs (including acquisitions from the EU)”
Box 4 is all about deductible VAT or “input VAT” (the amount of tax already paid on goods or services purchased for business operations, i.e. expenses). Here, you must show how much reclaimable VAT you have totted up in the relevant period (i.e. the quarter for which you are submitting your VAT Return).
Make sure to note that you cannot claim input VAT unless you are in possession of a proper VAT invoice as evidence. You might also be able to use this box to correct a VAT Return error from the last four years.
Box 5: “Net VAT to pay to HMRC or reclaim”
The fifth box is automatically populated by our VAT bridging template. Net VAT corresponds to the amount either to pay to or reclaim from HMRC in the given period, and it's based on your linked data from boxes 3 and 4.
Box 6: “Total value of sales and all other outputs excluding any VAT”
This box asks for the sum of all your outputs, excluding VAT. As such, it can include exports and any sales of reduced-rate or zero-rated goods, or sales outside the scope of UK VAT (e.g. sales in other jurisdictions). Bear in mind that it does not include:
- Insurance claims
- Personal investments into your business
- Dividends, loans or monetary gifts
Box 7: “The total value of purchases and all other inputs excluding any VAT”
The seventh box requires the sum total of purchases and other inputs to your business, excluding VAT. This must include:
- Imports
- Any “reverse charge” transactions (where tax liability lies with the buyer)
- Acquisitions of goods brought into Northern Ireland from the EU (i.e. box 9)
Bear in mind that this does not include values such as wages, money taken out of the company by you, insurance claims, or dividends. For a more comprehensive list, check out the HMRC guide.
Box 8: “For supplies of goods and related costs, excluding any VAT, from Northern Ireland to EU member states”
Since post-Brexit changes which came into effect in January 2021, box 8 now refers only to goods moved from Northern Ireland into the EU (source). The total value, excluding VAT, of any goods supplied from Northern Ireland into the EU must be digitally linked here. You must also include any directly related costs such as transport (freight) or insurance.
It’s important to remember that any value listed in this box must also be counted in box 6 (above). If you have not moved any goods from Northern Ireland into the EU, then the total for box 8 should be zero.
Box 9: “For acquisitions of goods and related costs, excluding any VAT, from EU member states to Northern Ireland”
As with box 8, box 9 has a narrower definition following Brexit-related changes: it only refers to goods moved from the EU into Northern Ireland. In this box, you must list the value of any goods (and directly related costs, e.g. freight or insurance) “from VAT-registered suppliers in EU member states” (source), excluding VAT.
Any value in this box must be included in box 7 (above). If your business has not acquired goods from the EU into Northern Ireland, then you can expect this box’s total value to be zero.
Conclusion
Although it’s essential to maintain detailed digital records as part of your business’s bookkeeping, it’s surprising how few figures (just nine!) are needed in your regular VAT Return submission. That being said, the devil’s in the details – so make sure that you digitally link the correct data into your VAT bridging template for Excel. The outline provided above is a good start, but it’s also advisable to read through HMRC’s comprehensive descriptions (especially if you have any doubts)!