VAT Return

About VAT Returns in TaxOptimiser

The VAT Return area in TaxOptimiser helps you prepare, review and submit your VAT figures to HMRC in line with Making Tax Digital (MTD) requirements. Whether you are a sole trader, landlord, small business owner or an accountant managing multiple clients, this feature is designed to streamline the process from bookkeeping through to filing.

This article walks you through how to set up VAT, generate a return, review the figures, submit to HMRC and handle common scenarios such as adjustments and corrections.

Before You Begin

To use the VAT Return feature, please make sure of the following:

• Your business is VAT registered with HMRC and you have your VAT registration number to hand.
• You have signed up for Making Tax Digital for VAT through your HMRC online account.
• Your bookkeeping in TaxOptimiser is up to date for the period you want to file.
• You have selected the correct VAT scheme (for example Standard, Cash, Flat Rate or Annual Accounting) in your settings.

Setting Up VAT in TaxOptimiser

Before you can prepare your first return, configure your VAT settings.

1. Go to Settings and select VAT.
2. Enter your VAT registration number.
3. Choose your VAT scheme from the dropdown menu.
4. Select your VAT return frequency (monthly, quarterly or annually).
5. Set the start date of your first VAT period in TaxOptimiser.
6. Connect to HMRC by selecting Authorise with HMRC and following the prompts to sign in with your Government Gateway credentials.

Once connected, TaxOptimiser will be able to retrieve obligations, submit returns and view your VAT liabilities and payments directly from HMRC.

Preparing Your VAT Return

Generating the Return

1. Open the VAT section from the main menu.
2. Select Create VAT Return.
3. Choose the relevant obligation period retrieved from HMRC.
4. TaxOptimiser will automatically populate the nine VAT return boxes based on the transactions recorded in your books for that period.

Understanding the Nine Boxes

The return is broken down into the standard HMRC boxes covering output VAT, input VAT, net VAT due, total sales and purchases, and EU or Northern Ireland figures where applicable. Hover over any box in TaxOptimiser to see a short description of what it represents.

Reviewing Transactions

Click into any box to see the underlying transactions that make up the total. From here you can:

• Check the VAT rate applied to each transaction.
• Edit a transaction if you spot a coding error.
• Add a missing transaction directly from the review screen.

Adjustments and Corrections

Making an Adjustment

If you need to adjust a box, for example to account for partial exemption, fuel scale charges or reverse charge entries, select Adjust next to the relevant box. Enter the adjustment value and a short description so you have a clear audit trail.

Correcting Errors From Previous Periods

Small errors from earlier returns can usually be corrected on your next return. TaxOptimiser will flag transactions dated before the current period that have not yet been included, and give you the option to roll them into the current return.

For larger errors, you may need to notify HMRC separately. Please refer to current HMRC guidance for the appropriate process.

Submitting to HMRC

1. Once you are satisfied the figures are correct, select Review and Submit.
2. Confirm the declaration that the information provided is true and complete.
3. Select Submit to HMRC.
4. Wait for the confirmation message and receipt reference from HMRC.

A copy of the submitted return, along with the HMRC receipt number, is stored in the VAT History tab for your records.

Tip: Download a PDF copy of each filed return for your own records or to share with a client. This is particularly useful for accountants managing audit trails across multiple businesses.

Paying Your VAT Bill

TaxOptimiser does not collect VAT payments directly. After submission, you will see a summary of the amount due and the payment deadline pulled from HMRC. Payment can be made through your usual HMRC channels, such as Direct Debit, Faster Payments or your HMRC online account.

Managing VAT for Multiple Clients (Accountants)

If you are using TaxOptimiser as an agent:

• Switch between client accounts from your practice dashboard.
• View upcoming VAT obligations across all clients in the Deadlines view.
• Mark returns as Ready for Client Approval before submission to keep your workflow organised.

Troubleshooting

I cannot see my VAT obligation

Check that your VAT registration number is entered correctly and that your HMRC authorisation is still active. Authorisations expire periodically and may need to be renewed.

My figures do not look right

Run the VAT detail report and compare it against your sales and purchase records. Common causes include transactions coded to the wrong VAT rate, duplicate entries, or transactions dated outside the return period.

My submission failed

If HMRC rejects the submission, an error message will be displayed. Common reasons include mismatched VAT numbers, expired authorisations or attempting to submit for a period that is not yet open. Resolve the issue and try again.

Need More Help?

If you have any questions or run into issues while preparing your VAT Return, please contact our support team or browse related articles in the Help Centre on bookkeeping, MTD and HMRC integrations.