With the world becoming more digitalized, some companies face an increasing need to move all of their accounting online, if they have not yet. Among the first things transferred to the digital world is VAT accounting. VAT online services, available for companies in the UK and many other countries, allow to hand the VAT management to external parties and simplify VAT accounting in-house. In this article, 1StopVAT team will discuss the online services available for business eligible for VAT in the UK.
Online VAT registration is an easy process that will enable you to create a VAT account and start charging VAT from your customers. If you decided to register for VAT, you would have to fill in an online form and submit it to the HMRC. VAT registration is obligatory once your turnover of the last 12 months exceeds £85,000.
Anyone who has already used online HMCR services can add VAT online services to their account, clicking the Making Tax Digital for VAT tab on their account. To set up the account, you will need to provide you VAT UK registration number, company postcode, VAT UK registration date and the details of your last VAT return.
Using this account, you will be able to fill in your VAT taxable sales and pay or receive the VAT difference.
If you manage VAT online, you can also use your HMCR online VAT account to change your business details.
VAT registered companies are required to let the authorities know as soon as any of the business identification details are updated, or there are any changes in partnerships. HMRC must be notified about changes in the following:
Keep in mind that a failure to inform HMRC about the changes in the information listed above can result in financial penalties to your business.
If you need to present a copy of your VAT returns to a third-party institution, you can do that using your online VAT account too. Simply log into your business tax account, go to your online VAT page and click on submitted returns – you can download the reports from here. You can also edit past returns using the same account.
Moreover, companies paying VAT in UK can use the VAT account for viewing outstanding liabilities and payments. To see
Digital services and goods providers can use the European VAT MOSS services for simplified VAT accounting. MOSS platform enables submitting VAT information to the tax authorities of the EU member countries where you sell your goods or services at once. VAT MOSS registered business can send in a single VAT returns declaration every calendar quarter instead of reporting directly to the tax authorities in the countries where the customers are based.
A business willing to use the UK VAT MOSS system needs to be VAT registered in the UK. Reminder: UK VAT payers will be restricted from using VAT MOSS starting from January 1, 2021, with last returns for sales in the EU submitted before January 20, 2021.
In case you have stopped selling goods or services taxable for VAT in UK, sold your business or your turnover fell below £83,000, you can withdraw your VAT registration by filling in an online form. To do that, you will need to register into your HMRC VAT account and click on the cancel your registration box. After the HMRC confirms that you are eligible for cancelling your registration, you will be notified about the effective date of the cancellation.