Calculating input tax and preparing for a VAT return


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We often get questions on VAT input tax, what it is and how it works. This blog will hopefully help you prepare for a VAT return and give you some key points that people usually overlook.

Once registered for VAT, businesses must charge VAT on their goods or services sold, pay VAT on business purchases from supplies and must file a VAT return at least every quarter for HMRC.

Input tax allows a person/business to lower the amount of output tax they pay to HMRC if they are registered for VAT. It is based on the VAT that they pay to their suppliers or for any purchases they make that relate to their business. The purchases must be directly related to the running of the business. There are certain criteria that must be met for the person/business to be able to claim VAT back:

  • The VAT charged must be made to the person/business that is claiming back
  • The purchases must relate to the business
  • The amount should relate to the accounting period that you are claiming back for
  • There must be documented evidence of the purchases

To reclaim input VAT on an invoice, you must have paid the invoice within 6 months of receiving the supplies. If you do not pay your supplier within these 6 months, then you must repay the input VAT that you have reclaimed, back to HMRC.

Preparing for a VAT return

HMRC expect you to submit a VAT return at least every 3 months (also known as every quarter). Once you are registered you must submit a return, even if it is nil. If at any point you cancel your VAT registration, you must send a final VAT return to HMRC.

If you have any questions or queries, feel free to contact us on 0161 236 7677 and ask to speak to a member of our team. You could also visit for further contact details and blogs.