Notice 700/12 Filling in your VAT Return

October 2011

Foreword
This notice cancels and replaces Notice 700/12 (March 2002). Details of any
changes to the previous version can be found in paragraph 1.1 of this notice.

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 hmrc.gov.uk.
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
dont have to submit your return online or pay electronically if either of the following
applies:

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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.

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.

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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.

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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.

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.
If you use a retail scheme, please see Notice 727 Retail Schemes.

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

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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.

3.2 Filling in box 1

Box 1 VAT due in the period on sales and other outputs
Include the VAT due on all goods and services you supplied in the period
covered by the return. This is your output VAT (or output tax) for the period.
VAT may also be due on supplies outside the mainstream of your business.
Some examples are:

fuel used for private motoring where VAT is accounted for using a scale
charge (see Notice 700/64 Motoring expenses)
the sale of stocks and assets
goods you take out of the business for your own private use
VAT due under reverse charge accounting and the gold scheme (see
paragraph 4.6)
supplies to your staff
gifts of goods that cost you more than 50, excluding VAT
supplies of goods to customers not registered for VAT in another Member
State including distance sales from the UK to another Member State
where supplies are below the distance selling threshold in that Member
State
distance sales to the UK which are above the UK distance selling
threshold or, if below the threshold but the overseas supplier opts to
register for VAT in the UK
commission received for selling something on behalf of someone else
VAT shown on self-billed invoices issued by your customer, and
supplies of installed or assembled goods in the UK where an overseas
supplier is registered for VAT here (see Notice 725 The single market for
more details).
Points to remember when filling in box 1:

deduct any VAT on credit notes issued by you

deduct any VAT when you make refunds under the retail export scheme
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include VAT on the full value of the goods where you have taken
something in part exchange
leave out any amounts notified to you as assessments by us
you can sometimes include VAT underdeclared/overdeclared on previous
returns but see paragraph 6.6 for the special rules that apply, and
you must not declare zero-rated exports or supplies to other EC Member
States unless certain conditions are met (see Notice 703 VAT: Exports of
goods from the United Kingdom or Notice 725 The single market).

3.3 Filling in box 2

Box 2 The VAT due in the period on acquisitions from other Member
States of the European Community (EC).
Show the VAT due on all goods and related costs purchased from VAT
registered suppliers in other EC Member States such purchases are
referred to as acquisitions. Related costs include any payment which you
make to cover your suppliers costs in making the supply, such as packing,
transport or insurance for which they are responsible under their contract with
you. You must include the VAT due on all your acquisitions for the VAT period
in which the tax point occurs. This is the earlier of the date of issue to you of
the invoice from your supplier or the 15th day of the month following the one in
which the goods were sent to you.
You may also be entitled to reclaim this amount as input VAT and do so by
including the relevant figure within the total at box 4 (but see the rules for
reclaiming input VAT in Notice 700 The VAT Guide).
Information about trading within the EC is contained in Notice 725 The single
market.

3.4 Filling in box 3

Box 3 Total VAT due
Show the total VAT due, that is, boxes 1 and 2 added together. This is
referred to as your output VAT (or output tax) for the period.
This figure will be calculated automatically if you are completing your
return online.

3.5 Filling in box 4

Box 4 VAT reclaimed in the period on purchases and other inputs

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(including acquisitions from the EC).

Show the total amount of deductible VAT charged on your business
purchases. This is referred to as your input VAT (or input tax) for the period.
You cannot claim input VAT on your return unless you have a proper VAT
invoice to support the claim (but see the rules in Notice 700 The VAT Guide).
You can reclaim:

VAT you have paid under the reverse charge procedure or the gold
scheme (see paragraph 4.6)
VAT you can reclaim on acquisitions of goods from VAT registered
suppliers in other EC Member States (this must correspond with the
amount declared within box 2)
VAT you pay on imports from countries outside the EC (provided you have
received the relevant import VAT certificate)
VAT you are claiming back as bad debt relief, see Notice 700/18 Relief
from VAT on bad debts
VAT you pay on removals from a warehousing regime or a free zone
VAT shown on self-billed invoices issued by you.

Points to remember when filling in box 4

make sure you do not include VAT:

you pay on goods bought wholly for your personal use

on business entertainment expenses
on second-hand goods that youve bought under one of the VAT secondhand schemes (see Notice 718 The VAT Margin Scheme and global
accounting, Notice 718/1 The VAT Margin Scheme on second-hand cars
and other vehicles, Notice 718/2 The VAT Auctioneers Scheme), and
where you receive self-billed invoices.

Other points to remember:

deduct VAT on any credit notes issued to you

you can sometimes include VAT underdeclared/overdeclared on previous
returns but see paragraph 6.6 for the special rules that apply
leave out any amounts notified to you by us as overdeclarations
leave out amounts paid on assessments or amounts which we already
owe you, and
if you are partly exempt your recovery of input VAT is subject to partial
exemption rules (see Notice 706 Partial exemption).

3.6 Filling in box 5

Box 5 Net VAT to be paid to HMRC or reclaimed

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Take the figures in boxes 3 and 4. Deduct the smaller from the larger and
enter the difference in box 5.
This figure will be calculated automatically if you are completing your
return online.
If the figure in box 3 is more than the figure in box 4, the difference is the
amount you must pay. If the figure in box 3 is less than the figure in box 4 we
will credit your account and repay the balance, subject to any enquiries we
may need to make.

3.7 Filling in box 6

Box 6 Total value of sales and all other outputs excluding any VAT
Show the total value of all your business sales and other specific outputs but
leave out any VAT. Some examples are:

zero-rate, reduced-rate and exempt supplies

fuel scale charges (see Notice 700/64 Motoring expenses)
exports
supplies to other EC Member States (that is any figure entered in box 8)
supplies of installed or assembled goods in the UK where the overseas
supplier registers for VAT here
distance sales to the UK which are above the UK distance selling
threshold or, if below the threshold but the overseas supplier opts to
register for VAT in the UK
reverse charge transactions (see paragraph 4.6 ), and
supplies which are outside the scope of UK VAT as described in Notice
741A Place of supply of services, and
deposits for which an invoice has been issued.

However, you do not include in box 6 any of the following:

money you have personally put into the business

loans, dividends, and gifts of money
insurance claims, or
Stock Exchange dealings (unless you are a financial institution).

3.8 Filling in box 7

Box 7 The total value of purchases and all other inputs excluding any
VAT
Show the total value of your purchases and expenses but leave out any
VAT.

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You must include the value of:

imports
acquisitions from VAT registered suppliers in other EC Member States
(that is any figure entered in box 9)
'reverse charge' transactions (see paragraph 4.6)

However, you do not include the value of any of the following:

wages and salaries

PAYE and National Insurance contributions
money taken out of the business by you
loans, dividends, and gifts of money
insurance claims
Stock Exchange dealings (unless you are a financial institution)
MOT certificates
motor vehicle licence duty
local authority rates, or
income which is outside the scope of VAT because it is not consideration
for a supply.

3.9 Filling in box 8

Box 8 Total value of all supplies of goods and related costs, excluding
any VAT, to other EC Member States

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Show the total value of all supplies of goods to other EC Member States and
directly related costs, such as freight and insurance, where these form part of
the invoice or contract price. This must include the value of any goods
dispatched from the UK to a destination in another Member State, even if no
actual sale is involved or the sale is being invoiced to a person located
outside the EC. Leave out any VAT. See Notice 725 The single market for
further information on trading within the EC.
You must include the value of supplies such as:

any goods dispatched from the UK to a destination in another Member

State
goods dispatched from the UK for installation or assembly in another
Member State
the value of supplies of new means of transport to unregistered customers
in another Member State (see Notice 728 New means of transport), and
distance sales to unregistered customers in another Member State where
the value of your distance sales have exceeded the distance selling
threshold of that Member State.

However, you do not include in box 8 the value of any of the following:

services related to the supply of goods that have been invoiced separately
separate supplies of services, such as legal or financial services
the goods themselves when you are supplying processing work, or
sales made in the UK to unregistered customers in another EC Member
State where the supplies are not distance sales.

Remember: Figures entered in this box must also be included in the box 6
total.

3.10

Filling in box 9

Box 9 Total value of all acquisitions of goods and related costs,

excluding any VAT, from other EC Member States
Show the total value of all acquisitions of goods from VAT registered suppliers
in other EC Member States and directly related costs, such as freight and
insurance, where these form part of the invoice or contract price, but leave
out any VAT.
You must include the value of supplies such as:

acquisitions made within the return period in which the tax point occurs,
and
goods installed or assembled in the UK where those goods have been
dispatched from another EC Member State.

However, you do not include in box 9 the value of any of the following:

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the goods themselves when you are supplying processing work.

services related to acquisitions that have been invoiced separately
separate supplies of services.

Remember: Figures entered in this box must also be included in the box 7
total.

4 Filling in the return if you use a VAT

Accounting Scheme
If you use any of the special VAT accounting schemes there may be different rules
for completing some of the boxes on the VAT return (see the guidance at paragraphs
4.1 to 4.6). Other boxes should be completed in the normal way as shown in section
3.
If you trade in other goods and services outside a special scheme you should also
include those supplies on your VAT return in the normal way.

4.1 Flat Rate Scheme for small businesses

This scheme allows small businesses an alternative to the normal method of
accounting for VAT. Under this scheme you can work out your VAT by applying a flat
rate percentage to your total turnover (including VAT).
If you use this scheme there are special rules for completing boxes 1, 4, 6 and 7 of
the VAT return. These are shown below. All other boxes are completed as normal.
Box 1 VAT due on sales
To calculate the VAT due under the flat rate scheme, you must apply the flat rate
percentage for your trade sector to the total of all your supplies, including VAT. This
includes your supplies at the standard and reduced rates and any which are zero
rated or exempt. You may have other output tax to include in the box such as the
sale of capital expenditure goods on which you have claimed input tax separately
while using the flat rate scheme.
You should also use this box to record transactions that are subject to the reverse
charge (see paragraph 4.6).
Box 4 Total input VAT
If you use the flat rate scheme you do not normally make a separate claim for input
VAT, including any VAT on imports or acquisitions, as the flat rate percentage for
your trade sector includes an allowance for input VAT.

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However, you can recover VAT on any single purchase of capital goods of 2,000 or
more, including VAT, and VAT on stocks and assets on hand at registration. For
details, see Notice 733 Flat Rate Scheme for small businesses.
You should also use this box to claim Bad Debt Relief and to account for reverse
charge transactions (see paragraph 4.6).
Box 6 Total value of sales
Enter the turnover to which you applied your flat rate percentage, including VAT. You
should also include the value, excluding VAT, of any supplies accounted for outside
the flat rate scheme, such as the sale of any capital goods on which you have
reclaimed input VAT, and reverse charge transactions. Also include any amount you
have entered in box 8.
Box 7 Total value of purchases
Usually there will be no figure in this box unless you have bought a capital good
costing more than 2,000 (including VAT) and you are claiming the input VAT in box
4. In which case, enter the purchase price, excluding VAT. Also include in box 7 any
amount you have entered in box 9 and reverse charge transactions.
Further information about the scheme is available in Notice 733 Flat Rate Scheme for
small businesses.

4.2 Cash Accounting Scheme

This scheme allows you to account for VAT on the basis of payments you receive
and make, rather than on invoices you issue and receive.
If you use this scheme there are special rules for completing boxes 1, 4, 6 and 7 of
the VAT return. These are shown below. All other boxes are completed as normal.
Box 1 VAT due on sales
If you use the cash accounting scheme, you must base the figure you put in this box
on the payments you have received, not the invoices you have issued.
Box 4 Total input VAT
If you use the cash accounting scheme, you must base your input VAT claim on
payments made, not invoices received. However, you cannot use the scheme for
acquisitions of goods from other EC Member States, or for imports. You must
account for the VAT on such purchases in the normal way and add that amount to
your cash accounting figure in this box.
Box 6 Total value of sales
Enter the value of all your sales, excluding VAT, for the period based on the
payments you have received, not the invoices issued. Also include in box 6 any
amount you have entered in box 8.

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Box 7 Total value of purchases

Enter the value of all your purchases of goods and services for the period, excluding
VAT, based on the payments you have made, not the invoices received. Also include
in box 7 any amount you have entered in box 9.
Further information about the scheme is available in Notice 731 Cash accounting.

4.3 Annual Accounting Scheme

This allows you to complete one VAT return each year and you pay regular
instalments of the VAT you expect to owe to avoid a large bill at the end of the year.
If you use this scheme complete all boxes on the VAT return in the normal way for
the VAT period.
Box 5 Net VAT to be paid to HMRC or reclaimed by you
Do not deduct any instalments you have paid during the period when calculating the
figure to put into this box.
However, the end of the year payment you send with your annual return should be
the box 5 figure minus any instalments you have already made for the period.
Further information about the scheme is available in Notice 732 Annual accounting.

4.4 Margin scheme for second-hand goods,

works of art, antiques and collectors items
VAT is normally due on the full value of the goods you sell. If you trade in secondhand goods, works of art, antiques and collectors items, you may be eligible to use
the Margin Scheme. The Margin Scheme allows you to calculate VAT on the
difference (or margin) between your buying price and your selling price. If no profit is
made (because the purchase price exceeds the selling price) then no VAT is
payable.
If you use the Margin Scheme there are special rules for completing boxes 1, 6, and
7 on the VAT return. These are shown below. If you also trade in goods and services
outside the Margin Scheme you must account for those supplies on your VAT return
in the normal way (described in section 3 above).
Box 1 VAT due on sales
Include the output VAT due on all eligible goods sold in the period covered by the
return.
Box 6 Total value of sales
Include the full selling price of all eligible goods sold in the period, less any VAT due
on the margin.

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Box 7 Total value of purchases

Include the full purchase price of eligible goods bought in the period.
There is no requirement to include Margin Scheme purchases or sales in boxes 8
and 9 of your VAT return.
Further information about the scheme is available in Notice 718 The VAT Margin
Scheme and global accounting, Notice 718/1 The VAT Margin Scheme on secondhand cars and other vehicles, Notice 718/2 The VAT Auctioneers Scheme.

4.5 Payments on account (POA)

Every VAT registered business with an annual VAT liability of more than 2.3 million
is required to make payments on account (POA).
Once in POA each business must make interim payments at the end of the second
and third months of each VAT quarter. These interim payments are payments on
account of the quarterly VAT liability. A balancing payment for the quarter, that is the
quarterly liability less the payments on account made, is then made with the VAT
return.
When you complete your VAT return you should fill in and send your quarterly returns
in the normal way. Do not adjust any figures on the return to take account of
payments on account which you have made. However, the amount to be paid is
the net liability shown on the return less any payments on account that have already
been made in respect of that period.
Repayments that may be due will be made under the normal rules. If your return is a
repayment return, the payments on account made in the quarter will also be repaid
subject to any debt on file.
Further information is available in Notice 700/60 Payments on account.

4.6 Reverse charge accounting

Under the reverse charge procedure, the purchaser of the goods or services, rather
than the seller, is liable to account for the VAT on the sale. The VAT return should be
completed in accordance with the guidance in the following table:
If you use the reverse
charge for

....and you are the

supplier, fill in

.and you are the

customer, fill in

Gold

Box 6 (value of the supply)

Services

Box 6 (value of the supply)

Box 1 (output VAT)

Box 4 (input VAT)
Box 6 (value of the
deemed supply)
Box 7 (purchase value)
Box 1 (output VAT)
Box 4 (input VAT)

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Box 6 (value of the

deemed supply)
Box 7 (purchase value)
Mobile phones and
computer chips

Box 6 (value of the supply)

Box 1 (output VAT)

Box 4 (input VAT)
Box 7 (purchase value)
Further information is available in Notice 701/21 Gold, Notice 735 Reverse charge on
mobile phones and computer chips and Notice 741A Place of supply of services.

5 Submitting your return and making

payment
5.1 Submitting your return and making
payment electronically
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
dont have to submit your return online or pay electronically if either of the following
applies:

you are 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 (or your accountant or other agent) can opt to use either the free HMRC VAT
Online service or commercial software. You can benefit from the built-in safeguards
which include:

an on screen acknowledgement, and

automatic calculations to reduce errors.

You will also be able to make payment by Direct Debit and you may get additional
time in which to submit your return and make payment.
To enrol for this service go to VAT.

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5.2 When to send us your VAT return and

payment
The table below gives details about the deadlines for submitting your return and
paying your VAT. The deadlines will depend on how you submit and pay your return.
If you send
us

Then

Further information

a paper return
and pay by
cheque

they must reach us in time for

your cheque to clear into our
bank account no later than the
due date shown on your return,
which is normally one month
after the end of the VAT period.
You need to take account of
postal delays, weekends and
bank holidays.

Cheque payments by post are

treated as being received on
the date when cleared funds
reach our bank account. This
means that you must allow
enough time for the payment to
reach us and to clear into our
bank account no later than the
due date shown on your return.
A cheque takes three bank
working days to clear
excluding Saturdays, Sundays,
and bank holidays.

If you use the Annual Accounting

scheme, your due date is two
months (not one month) after the
end of the VAT period. Your
return and payment must reach
us in time for your cheque to
clear into our bank account no
later than the due date shown on
your return.

To allow for possible postal

delays we advise you to allow
at least three working days for
your return and payment to
reach us and a further three
working days for your cheque
to clear to our account.
If you make Payments on
Account you must use one of
the electronic methods
described at paragraphs 5.3.2
to 5.3.6.

a paper return
and pay
electronically

you can get up to seven extra

calendar days for both your
return and electronic payment to
reach us (unless you use the
Annual Accounting scheme or
make Payments on Account).
You must ensure that cleared
funds are received in our bank
account by the seventh calendar
day after the due date shown on
your return, or you may be liable

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If the seventh calendar day falls

on a weekend or bank holiday,
your return and payment
(cleared funds) must reach us
before then.
Apart from payments made by
CHAPS, it normally takes three
bank working days for a
payment to clear to our
account. Bank working days
are Monday to Friday excluding
bank holidays. Please check

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to a surcharge for late payment.

You dont get extra time to
submit a paper return if the net
tax is nil or is a repayment.
For full details of the extra time
and electronic payment methods
available, go to How to pay VAT.
an electronic
return and
electronic
payment
(except Online
Direct Debit)

you will normally get an extra

seven calendar days for your
return (including nil and
repayment returns) and any
electronic payment to reach us
(unless you use the Annual
Accounting scheme or make
Payments on Account).

with your bank or building

society to see how long they
take to transfer a payment and
what their cut off time for
initiating a payment is. If your
bank or building society takes
longer, you will need to initiate
your payment earlier.
If you submit your return online
you must pay by an approved
electronic method.
For details of the extra time and
approved electronic methods,
go to How to pay VAT.

When you view your return

online, the due date shown onscreen includes the extra seven
days. If the due date falls on a
weekend or bank holiday your
payment (cleared funds) must
reach us before then.
If your payment arrives later than
this you may be liable to a
surcharge for late payment.
An electronic
return and pay
by Online
Direct Debit

you will normally get an extra

seven calendar days for your
return to reach us (unless you
use the Annual Accounting
scheme or make Payments on
Account).
When you view your return
online, the due date shown onscreen includes the extra seven
days. It will then be a further
three bank working days before
the payment is collected from
your bank account. Bank working
days are Monday to Friday
excluding bank holidays.

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You must set up your Direct

Debit Instruction (DDI) before
you submit your next return and
at least two bank working days
before the return is due when
the due date falls on a
weekday. If your return due
date falls on a weekend or
bank holiday you will need to
set up your DDI at least three
bank working days before the
return is due. See paragraph
5.3.1 below for more
information about this

Notice 700/12 Filling in your VAT Return

October 2011

5.3 Paying HMRC

We accept payment by a range of methods but recommend electronic payment.
Electronic payment is safe and secure and avoids postal costs and delays. If you
submit your return online you must pay by an approved electronic method.
HMRC uses two banking suppliers:

Citi for payments made by Bacs Direct Credit, internet/telephone

banking and CHAPS see paragraph 5.5 for the correct bank
account details.

NatWest (part of the Royal Bank of Scotland Group) for

payments made by bank giro see paragraph 5.3.5

To ensure that your payment is received you must use the correct HMRC bank
account details and paying-in slips.
However you pay, if the net VAT payable to us is less than 1, you do not need to
pay us at all. Do not carry forward amounts of under 1 to your next VAT return.
For full details about the payment options available, see below or go to How to pay
VAT.

5.3.1 Direct Debit

When you enrol for the VAT Online service you can choose to pay by Direct Debit.
HMRC will only collect the amount you have shown as being due on your VAT
Return and will never collect any other outstanding amounts by Direct Debit. At all
times you are fully protected by the Direct Debit guarantee.
If you are the authorised signatory you can set up the Direct Debit Instruction (DDI)
online by accessing the Submit a VAT return/Set up a VAT Direct Debit Instruction
link on the home page.
If you are not the authorised signatory you can print out a paper copy from the online
service to complete and return by post. We will send you an acknowledgement when
we have processed your DDI, which will tell you its effective start date.
You must set up your online DDI before you submit your next return and at least two
bank working days before the return is due when the due date falls on a weekday.
For example, if your return is due on Tuesday 7 September, two bank working days
before this is Friday 3 September. If your return due date falls on a weekend or bank
holiday you will need to set up your DDI at least three bank working days before the
return is due. For example, if your return is due on Sunday 7 November, three bank
working days before this is Wednesday 3 November.
If your return is due in less than two or three bank working days as shown in the
examples above then for this return only you will need to pay by a different
electronic method.

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Bank working days are Monday to Friday, excluding bank holidays.

You cannot pay by online Direct Debit if you make Payments on Account and submit
quarterly returns.

5.3.2 Debit or Credit card over the Internet

If you have a debit or credit card issued by a UK card issuer, you can pay your VAT
over the internet using the BillPay service. This is a service provided by Santander
Corporate Banking (formerly Alliance & Leicester Commercial Bank PLC). To make
your payment you will need:

debit or credit card details, and

your VAT registration number.

Please note:

there will be a non-refundable transaction charge for payments

by credit card

HMRC does not accept American Express or Diners Club cards,

and

you cannot pay surcharges, interest or penalties in this way.

5.3.3 Bacs Direct Credit, Internet or Telephone Banking

All banks and building societies that offer payment by Bacs Direct Credit, Internet or
Telephone banking can accept VAT payments.
When you pay by this method funds are transferred automatically from your bank or
building society account to ours. You tell your bank or building society when to make
the payment. Please advise your bank or building society to quote your VAT
registration number when making payment.
It normally takes three bank working days for the payment to reach HMRC. Bank
working days are Monday to Friday excluding bank holidays. Some bank and building
societies can take longer. You should check with your bank or building society to see
how long they take to transfer payment and what their cut-off time is for initiating
payment. If they take longer you will need to initiate your payment earlier.

5.3.4 CHAPS
The CHAPS system enables you to tell your bank or building society to make an
immediate payment. You know for certain that payment will reach us on the day the
bank makes the payment.

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CHAPS payments are more expensive than other payment methods but may be of
benefit if you make very large payments. We receive same day value so long as you
initiate payment within the time specified by your bank (usually between 9.00am and
3.00pm). Please advise your bank to quote your VAT registration number when
making payment.

5.3.5 Bank Giro

If your bank or building society offers the bank giro service, you can make a VAT
payment at your own branch by cash or cheque using a bank giro paying-in slip. We
treat any payment made by bank giro as electronic.
To use this payment method we need to send you a book of paying-in slips that are
pre-printed with your VAT registration number and our bank account details. You can
order a book of paying-in slips by emailing electronicpaymentteam@hmrc.gsi.gov.uk
or phoning 01702 366376 or 01702 366314. Please note that it can take up to six
weeks for the paying-in slip to be printed and sent to you.
When paying by bank giro please use only an official HMRC paying-in slip. Official
paying-in slips contain the correct HMRC bank account information and this will
ensure that your payment reaches our account on time.
HMRC now uses NatWest as its giro bank supplier, so please make sure that you are
using a paying-in slip that shows the new NatWest account details. You can identify a
new paying-in slip as it will have NatWest Bank PLC on it.
Once you have received your book of paying-in slips:

take your official pre-printed paying-in slip and payment to your

own bank or building society branch. Other banks may refuse to
accept it or charge you for this service.

make your cheque payable to HM REVENUE & CUSTOMS

ONLY followed by your VAT registration number.

To allow for possible delays in bank processing (for which HMRC is not responsible)
please allow at least three bank working days for your payment to reach us. Bank
working days are Monday to Friday excluding bank holidays.

5.3.6 Standing Order

You can pay by standing order if you have been accepted for the Annual Accounting
Scheme or you make Payments on Account.
A Standing Order authority request form can be found at How to pay VAT, or
alternatively you can set up a standing order using your own bank or building
societys internet or telephone banking service. To do this you will need to provide
your bank or building society with HMRCs bank account details these are shown in
paragraph 5.5. If you make a mistake with the sort code or account number there
may be a delay before your record is credited or your payment may not be received
at all. You may also be liable to a surcharge for late payment.

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October 2011

5.3.7 By post
If you are not required to submit your VAT return online and pay electronically, you
can still pay by posting us a cheque. Cheque payments made by post are treated as
being received by us on the date when cleared funds reach our bank account not
the date when we receive the cheque. This means that you must allow sufficient time
for the payment to reach us and clear into our bank account, no later than the due
date shown on your paper VAT return. A cheque takes three bank working days to
clear. Bank working days are Monday to Friday excluding bank holidays. To allow for
possible postal delays (for which HMRC is not responsible) please allow at least
three working days for the cheque payment to reach us and a further three days for
the payment to clear our bank account.
If your cheque payment does not clear by the due date shown on your paper VAT
return, you may be liable to a surcharge for late payment.
If you use this method:

make your cheque payable to HM REVENUE & CUSTOMS

ONLY

include your VAT Registration Number after HM REVENUE &

CUSTOMS ONLY, and

send your return and cheque to HMRC in the envelope provided.

If you do not have a return envelope, please send your return and payment to:
VAT Controller
VAT Central Unit
BX5 5AT
If you post your return from abroad please add United Kingdom below the post
code.
Where exceptionally you need to use a private courier service to deliver your return
please use the following address:
HM Revenue & Customs
Alexander House
Southend
SS99 1AA

5.3.8 Information about the Faster Payments Service

HMRC is currently unable to receive or make payments using the Faster Payments
Service (FPS) which is offered by some banks; however we will be reviewing the
situation and will update our internet website if the position changes.

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October 2011

5.4 Your payment reference

When making payment you must always provide details of your VAT registration
number as the payment reference. The VAT registration number is made up of 9
digits, for example, 123 4567 89.
It is important that you show your registration number with no gaps between the
characters, for example, 123456789. Without your registration number we will not be
able to update your customer account electronically. The delay with updating your
account may result in surcharge notices or requests for payment being issued.

5.5 HMRC bank account details

If you are paying by Bacs Direct Credit, internet/telephone banking, or by CHAPS
you will need to provide your bank with our bank account details as follows:
Account details
Sort code
Account Number
Account Name

08-32-00
11963155
HMRC VAT

If your bank asks for the address of the bank to which payment is being made please
use
Citi
Citigroup Centre
Canada Square
Canary Wharf
London
E14 5LB
If you are making a payment from an overseas bank account our International Bank
Account Number (IBAN) is:
Account details
Swift Bank Identifier Code (BIC)

CITIGB2L

International Bank Account

Number (IBAN)

GB25CITI0832001 1963155

Account Name

HMRC VAT

Please note: Where an IBAN is shown you must give this number as well as the
SWIFT BIC.

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October 2011

Frequently asked questions

6.1 What if I cannot complete my return and/or

pay the VAT by the due date?
If you do not have all the information you need to complete your return or you think
that you will be unable to send in your return by the due date, you should contact the
VAT Helpline on 0845 010 9000 immediately explaining the circumstances.
If you think you will have problems paying the VAT by the due date you should ring
the Business Payment Support Team on 0845 302 1435 immediately. Dont wait until
the payment is overdue. Further information can be found on the Business Payment
Support Service page.
See Notice 700/50 Default Surcharge and Notice 930 What if I dont pay?.

6.2 What if I submit my return and payment

late?
We will notify you if we received your return and/or payment late and you may be
liable to a surcharge. It is therefore in your own interests to make sure we receive
your returns and payments on time.
You can find out more about this in Notice 700/50 Default surcharge.
For further information on how to make a payment, go to How to pay VAT.

6.3 What if I lose my paper return?

If you have lost or mislaid the original form do not be tempted to alter another VAT
return form or send your VAT declaration in another way. You should contact the
VAT Helpline on 0845 010 9000 immediately and ask for a replacement, but please
remember that we cannot provide paper versions of any returns that you are required
to submit online.

6.4 What if I am unable to send an electronic

return due to a system problem?
If the system crashes or the website is not available, you should phone our VAT
Online Services Helpdesk on 0845 010 8500. They will tell you what you should do.
In the meantime you should still make arrangements to pay any VAT due
electronically and on time.

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October 2011

6.5 What if I receive an assessment from HMRC

because I have failed to send in a return?
You should send us the return immediately, with the correct figures for the VAT
period. If you receive such an assessment and it understates your VAT liability and
you do not tell us within 30 days, you may be liable to a penalty and interest.
The table below gives information about making payments.
If you

then

have not paid the assessment and

box 5 of the return shows that you
owe us VAT,

you should pay the full amount shown

as due, not the amount on the
assessment.

have already paid the assessment

and the amount shown in box 5 is
more than the assessment,

you should send us a payment for the

balance with the return.

have paid the assessment and the

amount shown in box 5 is less than
the assessment,

we will repay or credit you with the

overpayment subject to any enquiries
we may need to make.

6.6 How can I correct errors on previous

returns?
You may be able to correct errors in VAT returns for the preceding four years by
using boxes 1 and 4 of the return for the period of discovery provided the net error is:

10,000 or less, or

between 10,000 and 50,000 and does not exceed 1% of the

total value of your sales (before correction) shown in box 6

Net errors exceeding 50,000 and those above 10,000 that exceed 1% of the box 6
amount must be separately notified.
Further information is contained in Notice 700/45 How to correct VAT errors and
make adjustments or claims.

6.7 How do I notify you about changes to my

business?
If your business circumstances change you must tell HMRC. Such changes will
include a new address, company name or trading style, and if you need to cancel
your VAT registration. Please notify changes:

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October 2011

Online for information on how to do this go to the HMRC page

Changes to your business details and your VAT registration.

By completing form VAT 484 and sending it to Grimsby National

Registration Service the address is on the form. You can
download the form from the HMRC website.

For information on how to cancel your VAT registration please see Cancelling your
VAT registration on our website.

7 Things to check before you send your

return
7.1 Checking your figures

If all your outputs are standard-rated, the total in box 1 should be

20% of the total in box 6. (Before 4 January 2011 the standard
VAT rate was 17.5%, and from 1 December 2008 to 31
December 2009 it was 15%).

If you have entered a value in box 9, remember to include any

acquisition tax due on your intra-EC acquisitions in boxes 2 and
4.

Your box 5 total should be the difference between boxes 3 and 4

this is calculated automatically if you complete your return
online.

If the total in box 8 is more than the total in box 6, or the total in
box 9 is more than the total in box 7, you may have transposed
the box figures in error.

When you complete your online return, please check that you
have entered the correct figures before you click on submit, as
you cant amend the return online after your have submitted it.

7.2 Other checks

Have you completed every box on the return, entering NONE

on paper returns and 0.00 on electronic returns if applicable?

Have you entered any negative figures on a paper return in

brackets, for example, (1000.00)? Insert a minus sign before
negative amounts on the online return for example -1000.00.

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Have you zero-rated any exports or removals without obtaining

valid evidence that the goods have left the UK within the
appropriate time limits? See Notice 703 Export of goods from the
United Kingdom and Notice 725 The single market.

Have you included any errors you may have found on previous
VAT returns? (see paragraph 6.6).

Have you made the necessary adjustments in boxes 1 and 4 for

credit notes received and issued by you?

Have you signed and dated the paper return?

If you are sending a cheque, have you signed and dated it

correctly, do the words and figures agree and is it made out to
HM Revenue & Customs followed by your VAT registration
number?

Please do not staple the cheque to the VAT return.

If you are paying by cheque have you enclosed the cheque?

If you are sending a cheque, remember that you must allow

enough time for the cheque to clear to our bank account by the
due date shown on your paper VAT return see paragraph 5.3.7

Make sure you have not included any correspondence with your
VAT return. Correspondence must be sent separately to the
appropriate office to ensure it is dealt with promptly. Contact the
VAT Helpline on 0845 010 9000 for help on where to send other
correspondence.

Have you made arrangements with your bank to make any

electronic payment, ensuring cleared funds are in our VAT
account by the appropriate date?

Have you provided your bank with our VAT account details?
They are:
Sort Code: 08-32-00
Account Number: 11963155
Account Name: HMRC VAT
see also paragraph 5.5

Have you provided your bank with your VAT-registered name

and VAT registration number as the pay reference, without any
gap in the nine-digits, for example 123456789 (see paragraph
5.4)?

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Have you notified our National Registration Service of any

changes in business circumstances (see paragraph 6.7)? Some
changes could affect the account into which any repayment may
be paid.

Your rights and obligations

Your Charter explains what you can expect from us and what we can expect from
you. For more information go to www.hmrc.gov.uk/charter.

Do you have any comments or suggestions?

If you have any comments or suggestions to make about this notice, please write to:
HM Revenue & Customs
VATAPPS Accounting Policy
1NW Queens Dock
Liverpool
L74 4AA
Please note this address is not for general enquiries.
For your general enquiries please phone our Helpline 0845 010 9000.

Putting things right

If you are not satisfied with our service, please let the person dealing with your affairs
know what is wrong. We will work as quickly as possible to put things right and settle
your complaint. If you are still unhappy, ask for your complaint to be referred to the
Complaints Manager.
For more information about our complaints procedures go to hmrc.gov.uk and under
quick links select Complaints.

How we use your information

HM Revenue & Customs is a Data Controller under the Data Protection Act 1998.
We hold information for the purposes specified in our notification to the Information
Commissioner, including the assessment and collection of tax and duties, the
payment of benefits and the prevention and detection of crime, and may use this
information for any of them.
We may get information about you from others, or we may give information to them.
If we do, it will only be as the law permits to:

check the accuracy of information

prevent or detect crime

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October 2011

protect public funds.

We may check information we receive about you with what is already in our records.
This can include information provided by you, as well as by others, such as other
government departments or agencies and overseas tax and customs authorities. We
will not give information to anyone outside HM Revenue & Customs unless the law
permits us to do so. For more information go to hmrc.gov.uk and look for Data
Protection Act within the Search facility.

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