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How to file a VAT return through FreeAgent

This article explains how to file a VAT return directly to HMRC through FreeAgent.

From 8th April 2021, you will need to use FreeAgent's Making Tax Digital (MTD) connection in order to file your VAT return to HMRC through FreeAgent. If you haven't already done so, please sign up to MTD and connect your FreeAgent account to HMRC before following the steps outlined below.

1. Navigate to the VAT return

To begin the filing process, navigate to the 'Taxes' tab at the top of the screen and select 'VAT' from the drop-down menu.

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Next, select the VAT return that you would like to file.

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To view a breakdown of the figures, select the 'Full Report' tab.

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Once you've reviewed the figures, Select ‘File online with HMRC’ in the top-right to begin the filing process.

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Spend some time working through the following checklist, as seen on the filing page:

  • Are your VAT registration and first VAT return dates correct?
  • Have you chosen invoice or cash accounting as appropriate for this VAT return?
  • Is your VAT Flat Rate Scheme setting correct? Remember this should be ‘Standard Scheme’ unless you’ve been accepted by HMRC to join the scheme.
  • Have you entered and explained all your bank transactions that fall within this VAT return period?
  • Have you included any transactions bought or sold outside the UK correctly?
  • Have you included and sent, or marked as sent, all your invoices that fall within this VAT return period?
  • Have you entered all your out-of-pocket expenses for the VAT return period?

Amend any mistakes you come across and double-check your figures to make sure everything is correct before you file.

2. File the VAT return

When filing under Making Tax Digital (MTD) for VAT, you’ll have to make a declaration before making your submission.

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Once you have made the declaration by ticking the box, select 'Submit VAT Return' and FreeAgent will send your return to HMRC using your Making Tax Digital (MTD) connection. It will tell you within a few seconds whether the submission was accepted or rejected.

How to pay your VAT bill

Once you have filed your VAT return, the panel on the right-hand side of the screen will be updated with information on how to pay this VAT bill.  Follow the link to pay the bill.

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If your VAT return is rejected

If you receive an error message when filing your VAT return, you may need to reconnect your FreeAgent account to HMRC. In this case, you will receive a message during the submission process informing you of the next steps.

If you receive a different error message, please see this article.

If you discover a mistake later

Once you’ve filed a return with HMRC, you can’t change it. FreeAgent will preserve your existing VAT return and put any corrections in your next open VAT return. Find out how to make corrections in a VAT locked period.

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