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Notice 700/12 Filling in your VAT return (October 2011)

1 Introduction
1.1 What is this notice about?
This notice helps you complete the VAT return. It will guide you through the form, box by box. It also contains some special advice for those using VAT accounting schemes and information about submitting your return electronically.

The notice has been restructured and streamlined to make it easier to read. It replaces the March 2002 edition (which was updated in 2004 and 2008).

The significant changes provide new information on:
- completion of the return when using a special VAT accounting scheme
- using the online VAT return
- paying electronically and qualifying for extra time
- using an accountant or agent to send your return online
- using commercially produced software packages to allow both single and bulk submissions, and
- the cleared funds rule for cheque payments by post.

You can access details of any changes to this notice since October 2010 on our internet website

This notice and others mentioned are available on our website. Please ensure that you read the notices relevant to your circumstances before you complete your VAT return.

1.2 Online VAT returns
Since 1 April 2010 all VAT-registered businesses with a VAT exclusive turnover of ?100,000 or more, plus any newly registered businesses (regardless of turnover), must submit their returns online and pay electronically. HMRC plans, from 1 April 2012, to extend this requirement to virtually all VAT-registered businesses. But you don?t have to submit your return online or pay electronically if either of the following applies:

- you're subject to an insolvency procedure - but if you have an approved Voluntary Arrangement you may submit online if you want to
- HMRC is satisfied that your business is run entirely by practising members of a religious society whose beliefs prevent them from using computers.

You can find out more about Online VAT returns on the HMRC website. The benefits of online VAT returns include:
- a safe and secure method of sending your VAT return
- an on-screen acknowledgement that we have received your return
- an option to receive an electronic reminder when your VAT return is due
- automatic calculations to reduce errors when completing the return
- in most cases, this gives you up to an extra seven calendar days to submit and pay your return (compared with the due date for paper returns and cheques sent by post) ? and if you pay by Direct Debit online at least ten extra calendar days to pay.

There are legal conditions that apply to submitting VAT returns online and receiving the extra time for paying electronically. These are on the HMRC website under ?Legal conditions?, ?Submit a return conditions? and ?Incentives for making an electronic return and paying VAT due by an approved electronic method?.

Section 5 of this notice contains more information.

2 Explanation of some common VAT terms
This section gives a brief summary of some of the common terms you will come across as you read this notice. But, if you are completing a VAT return for the first time, it might be helpful to look at the VAT guidance.

2.1 Supplies
This is the term for the sale of goods or services which you make by way of business. All goods and services that are subject to VAT (at the standard, reduced or zero rate) are called ?taxable supplies?.

2.2 Output VAT
This is the VAT on your sales of goods or services. These sales are known as outputs. Output VAT (or output tax) is the VAT you charge and collect from your customers on goods or services going out of the business if you are registered for VAT.

2.3 Input VAT
This is the VAT that you can claim on amounts paid to your suppliers for goods and services that you purchase for your business. These purchases are known as inputs. Input VAT (or input tax) is the VAT that you can reclaim on goods and services coming in to your business if you are registered for VAT. If you make, or intend to make, both taxable and exempt supplies and you incur input VAT that relates to both kinds of supply, you are classified as ?partly exempt?. Your recovery of input VAT in such circumstances is subject to the partial exemption rules (see Notice 706 Partial Exemption).

2.4 Tax due
Your VAT return requires you to record the output VAT payable to us and the input VAT you can claim back from us. If the output VAT is greater than the input VAT, you will owe the difference to us. This is a tax due return. If the input VAT you can claim is greater than the output VAT you owe, you will be due a repayment of VAT from us. This is a repayment return.

2.5 VAT period
The top of your VAT return will show the inclusive dates that the return covers. For example, if you submit quarterly returns and the end date shown on the return is 31 March 2009, then it will cover the period from 1 January 2009 to 31 March 2009 and be called period 03/09. If it ends on 31 August 2009, your return period will be called 08/09.

2.6 Tax point
There are rules for working out the time when a supply of goods or services is treated as taking place. This is called the tax point. You must account for VAT in the VAT period in which the tax point occurs at the rate in force at that time unless you use the Cash Accounting Scheme (see paragraph 4.2). More information on tax points is contained in Notice 700 The VAT Guide.

2.7 Imports
These are goods and related costs that you purchase for your business from suppliers outside the European Community (EC). Any VAT that you pay on these goods can be reclaimed as input VAT, subject to the normal rules (see Notice 702 Imports).

2.8 Acquisitions
These are the goods that you purchase from a VAT-registered business in another EC Member State and are dispatched or removed into the UK. You may have to account for VAT in the UK (referred to as ?acquisition tax?), but you can also recover that VAT as input VAT, subject to normal rules. For further information and details of EC Member States see Notice 725 The single market.

2.9 Exports
These are goods that you supply to customers outside the EC. Such supplies are normally be zero-rated, see Notice 703 VAT: Export of goods from the United Kingdom.

2.10 Dispatches or removals
These are goods that you supply to customers in other EC Member States which are dispatched or removed from the UK. Goods leaving the UK to go to other Member States are not called 'exports', but are referred to as dispatches or removals. The term ?export? is only used for goods leaving the UK to go to countries outside the EC.

3 How to fill in each box on your return
The requirements shown here apply to both paper and online VAT returns.
If you are using a special VAT accounting scheme such as the Flat Rate Scheme for small businesses, Cash Accounting, Annual Accounting, Margin Schemes for second hand goods, works of art, antiques and collectors? items, Payments on Account, or reverse charge accounting, please read section 4 before filling in your return.

3.1 Common requirements when completing boxes 1 to 9
When completing each box on the return you must:
- fill in all boxes clearly in black ink
- write ?NONE? where necessary on paper returns and ?0.00? on online returns
- not put a dash or leave any box blank
- if there are no pence, write ?00? in the pence column
- not enter more than one amount in any box, and
- if you have a negative amount in boxes 1 to 4, put the figure in brackets on a paper return, for example, (1000.00). Insert a minus sign before negative amounts on online returns, for example, -1000.00.

The paper version of the VAT return is designed to be read by machine. Please follow these rules so that the information declared can be easily read.

Click here for instructions on Filling in your VAT form

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