VAT Returns Made Easy: Avoiding Mistakes & Penalties
VAT doesn’t have to be stressful. But with tighter HMRC rules and full MTD for VAT now in place, mistakes can lead to penalties, overpayments, or missed claims. Here are the key things to watch out for.
Common VAT Mistakes to Avoid
1. Late Filing & Payments
The most common (and costly) error, late returns trigger interest and penalties.
Fix it: Keep bookkeeping updated monthly so the quarter-end isn’t a panic.
2. Missing Input VAT
Fuel, tools, materials, subscriptions, supplier invoices. If you are missing any of these it means you overpay VAT.
Fix it: Capture receipts digitally as you go.
3. Claiming VAT You Shouldn’t
Personal purchases, invalid invoices, or VAT from non-registered suppliers can all cause HMRC issues.
Fix it: Always check invoices include valid VAT numbers.
4. Being on the Wrong VAT Scheme
Flat Rate, Cash Accounting, Standard…. being on the wrong one can cost you.
Fix it: Review your scheme regularly.
MTD VAT: Staying Compliant
HMRC now requires:
- Digital records
- Software-based submissions
- No manual data copying
If your system isn’t fully digital, you risk penalties even if the numbers are correct.
Why Monthly Bookkeeping Helps
Regular bookkeeping means:
- Accurate, digital records
- No lost receipts
- Fewer mistakes
- Smoother quarter-end VAT
- On-time submissions every time
Need help with VAT?
We support businesses with monthly bookkeeping that keeps VAT accurate, compliant, and stress-free.
