Make sure everything’s in
Start by checking the period is complete. That means all your sales, including marketplace and card payouts, plus credit notes, supplier invoices and any adjustments. Then look for the odd ones: unusual VAT codes, large one-off transactions and anything that looks very different from last quarter. The right VAT treatment depends on what the transaction actually was, so the odd ones are worth a second look.
Reconcile the VAT account
The figures on the return should agree with the VAT account in your records. If they don’t, find out why. It might be a difference brought forward from last quarter, or a manual journal nobody explained. Keep a note of every change and the evidence behind it. Paying HMRC the amount on the return doesn’t prove the return was right. It only proves it was paid.
Check the evidence and digital records
HMRC sets out which VAT records you must keep. Under Making Tax Digital, most VAT-registered businesses also need compatible software, with figures passing between systems through digital links rather than being retyped. To reclaim VAT on a purchase you generally need a valid VAT invoice. Whoever approves the return should see any big adjustments and open questions before it’s filed.
Be clear who does what
Agree who prepares the return, who reviews it, who approves it, who files it and who pays. If a specialist adviser handles tricky VAT questions, like overseas sales or property, raise them well before the deadline. Don’t expect whoever posts the invoices to guess. When we run your finance function, VAT is part of it: we prepare and reconcile the return, flag the questions, and you approve it before anything is filed.
Example: while checking supplier statements, the team spots a £4,800 invoice from a building supplier that never reached the purchase records. The return may be missing that purchase, but you can’t reclaim the VAT from the statement alone. HMRC’s record rules mean you need the invoice itself. So the team asks the supplier for it, checks the VAT treatment and posts it to the right period. Only then does it go into the return.
What to check
- Every sale and purchase for the period
- Unusual VAT codes and big adjustments reviewed
- VAT account reconciled to the return
- Valid invoices behind every reclaim
- Named people to prepare, approve, file and pay
Where to start
Ask for a return pack: the reconciliation, a list of exceptions, any big adjustments and a sign-off. A screenshot of the nine boxes on its own isn’t enough. HMRC’s guidance on keeping VAT records is worth a read too.