VAT Return Services help UK businesses submit accurate, timely VAT returns to HMRC, stay compliant with Making Tax Digital rules, and avoid penalties. Whether you’re a sole trader, limited company, or SME, professional VAT support ensures you meet your obligations without the stress.
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Sources: HMRC Annual Report 2024, ONS Business Demography, ICAEW VAT Overview
Let us manage your VAT obligations so you can focus on your business. Speak with us today about your next return or how we can improve your current process.
Last updated August 2025. Written and reviewed by Allied Financial Group’s in-house team of qualified accountants, tax specialists, and marketing consultants. All services comply with UK regulatory standards. This content is based on publicly available sources and internal industry knowledge.
Fully compliant VAT services for businesses of all sizes. We handle your returns, keep you on track with deadlines, and ensure nothing gets missed.
Yes, HMRC offers schemes to simplify VAT accounting:
These schemes have specific eligibility criteria, and it's essential to assess if they are suitable for your business model.
Yes, in some cases. HMRC allows you to reclaim VAT on certain purchases made before you became VAT-registered:
To make these claims, you must have valid VAT invoices and accurate records.
VAT rules for international trade can be complex:
Understanding these rules is vital to ensure you're charging and reclaiming VAT correctly on cross-border transactions.
The UK primarily has three VAT rates:
Additionally, some goods and services are Exempt from VAT (e.g., insurance, healthcare, education), or are Outside the Scope of VAT (e.g., statutory fees, certain international transactions). You cannot reclaim VAT on expenses related to exempt supplies.
Errors on VAT returns and late submissions can lead to penalties. The UK introduced a new points-based penalty system in January 2023. You'll accrue penalty points for each late return, and once you reach a certain threshold, you'll incur a £200 penalty, with further penalties for continued non-compliance. Late VAT payments also incur interest charges. Minor errors (generally under £10,000) can often be corrected on your next VAT return, but larger errors require direct notification to HMRC. These are reasons why so many businesses make use of financial services like those offered by AFG to avoid any such penalities and exessive time spent on trying to mitigate or correct returns.
Making Tax Digital (MTD) is HMRC's initiative to digitalize the tax system. For VAT, it means that most VAT-registered businesses must maintain digital VAT records and submit their VAT returns using HMRC-approved accounting software or bridging software. This system aims to reduce errors and make tax reporting more efficient. All VAT-registered businesses, regardless of turnover, must comply with MTD for VAT.
VAT (Value Added Tax) is a consumption tax applied to most goods and services sold in the UK. While ultimately paid by the end consumer, businesses are responsible for collecting and remitting this tax to HM Revenue & Customs (HMRC). It's crucial for businesses because it's a significant source of government revenue, and incorrect VAT accounting can lead to severe penalties. Properly managing VAT allows you to reclaim VAT on eligible business purchases, impacting your cash flow and profitability.
At AFG, we provide comprehensive VAT services to ensure your business remains compliant and operates efficiently. Our services include:
You must register for VAT if your taxable turnover exceeds the current registration threshold. As of 1 April 2024, this threshold is £90,000 in any rolling 12-month period. Taxable turnover includes all sales that aren't VAT exempt, even if they are zero-rated. Even if your turnover is below the threshold, you can choose to voluntarily register for VAT. This can be beneficial as it allows you to reclaim VAT on your business purchases and can enhance your business's professional image.
While VAT principles might seem clear, their application can be incredibly complex, with numerous exceptions and specific rules. A qualified VAT specialist can help you: