What can I expect when my accountant completes my VAT return for me?
How do we get started?
When you ask someone else to produce your company accounts and tax return for you, you may wonder how that might work in practice. I can’t speak for every accountant or payroll operator but in this blog post I describe how the process works at Armet Accounting. You can also find out more about other services such as
payroll or
company accounts.
Initial steps
As part of the process of becoming a client, we will ask you for information about your business that will allow us to be able to submit your quarterly VAT return to HMRC. This information is now collected using an online portal once you have agreed to become a client.
Our initial discussions will involve a discussion around the nature of your business. This will help us to advise you on the correct rate of VAT for your sales or whether there is merit in using the flat rate scheme to calculate your VAT.
The HMRC authentication process is now by “digital handshake”. This requires you to be able to sign into your online VAT account via a link that we send you and then agree to authorise Armet Accounting to act as an agent for VAT.
After your VAT quarter end has passed
We will contact you by email to request information to allow us to draft, review and then submit your VAT return. Depending on your records, this may simply be confirmation that you have completed your bookkeeping for the period in question. For smaller businesses, it may be that we need you to send us copies of bank statements and your purchase and sales invoices for the quarter.
VAT returns are due to be submitted 1 month and 1 week after the end of the period. The sooner you can provide this information, the sooner we can provide you with the draft return and the longer lead time you have for making the payment.
On receipt of your information, we will process it as far as we can. All businesses are now required to comply with Making Tax Digital so in order to compile the VAT return we need to produce a list of transactions (date, description and amount) which we then summarise to produce the return that is sent to HMRC. The return must now be submitted using software to connect to HMRC.
Once we have such a list, we then work our way through our internal review process to ensure that the entries in your VAT return are correct.
When we have processed your information
At the first review, we are usually left with a list of questions that we need to speak to the business owner about. This could range from asking for specific documents or confirming our understanding of specific transactions or events that may affect the VAT return.
We will communicate the list of any questions to you. In the even that the questions are straightforward we may send them by email or if there is anything more complex or more urgent, we may try and speak to you over the phone.
Your answers to these questions will allow us to complete our review process, which will ensure that your VAT return is correct before submission to HMRC.
Once we are ready to submit the return
A copy of the information that we are submitting on your behalf will be posted to your client portal for you to review and approve, along with any additional information you need to be able to approve the return.
Is this process the same for every client?
Every VAT registered business is now required to comply with HMRC’s Making Tax Digital rules. This means that the VAT return needs to be compiled from a source of information that holds at least daily data about your business. For larger businesses, this may be a point of sale system with a digital link into your accounting software. For smaller businesses, this may be a list of transactions in an excel spreadsheet.
The fundamental process is similar for each business, although as your business grows in size and complexity it may take longer for us to ensure that your VAT return is ready to submit.
What do you need me to do?
We need you to provide your information as soon as possible after the quarter end and respond to any questions quickly. The VAT deadlines are very tight and we need to plan our work accordingly.
If it is not possible for us to complete our full process review before the deadline, we will not submit your return.
What can I expect from you?
Along with all the usual expectations of an accountant (such as confidentiality), you can expect us to be starting to work on your VAT return once the quarter end has passed. Even if you haven’t heard from us we may be reviewing what is contained in your bookkeeping software. We commit to submitting your return on time, where you have provided information to us at least a week before it is due.
If you have questions at any point along the way, you can call us or drop us an email.
