File your VAT return and record VAT payments in QuickBooks

If you haven’t already, make sure everything is correct before you file.

1. Go to Taxes and select VAT (Take me there).
2. Check which return is due this month, then select Prepare return.
3. Select the Accounting period, then update the End date, and the Submission date.
4. Review your VAT. Make sure everything is correct. If you need to add an adjustment for any entry, select Adjust. Fill up the adjustment details in the form, and select Save.
5. Take note of your total sales and purchases, the amount of VAT you owe, or you can reclaim, and the adjustment amount (if you added one). You’ll need these numbers later when you fill out your VAT return form.
6. After you have done with updating the details in the returns, select Mark as filed or Submit to HMRC.
7. Select Continue.

If you need a detailed look at what you owe, run your VAT liability report for the same VAT period. This helps you make sure everything is accurate before you file your return to your tax agency.

Run the VAT Liability report

The VAT Liability report is a summary of your taxable and non-taxable sales, plus the total sales tax you collected from customers. Here's how to run the report.

1. Go to Reports (Take me there).
2. In the Type report name here field, search for VAT Liability Report. Then, select the report.
3. Select the Report period ▼ dropdown. Select the correct date range depending on how often you file your tax.
4. Select the VAT Agency ▼ dropdown. Then, select All or just one VAT agency.
5. Select Run report.
6. Look at the Tax Amount column. Here, you can view the total tax amounts you collected from your customers. The amounts would include federal, regional, and local tax rates (such as city, county, and/or province).
7. To get a detailed look at what you owe, select any tax amount. A transaction report opens that shows how much tax you charged in each sale, and also shows you more info, like customers, transaction dates, and tax rate.

After you review your VAT, you can submit your return through Making Tax Digital (MTD) using a functional compatible software that can connect directly to HMRC.

1. Set up MTD for VAT in QuickBooks Online and connect to HMRC.
2. Fill out and submit your VAT return form. Refer to the total sales and purchases, the amount of VAT you owe, or you can reclaim, you took note of in Step 1.

Once you're done filing, it's time to keep your VAT info in QuickBooks up to date. Here's how to manually record your VAT payment or refund so that your VAT payable shows as zero.

If you filed online, go to your tax agency's website to check your return’s filing status. If you filed by mail, you can also call your tax agency directly to get an update on your return.

You can check your return’s filing status on the HMRC website.

Why isn't my VAT return status updating after payment/submission? Why are the dates still the same?

This is often a temporary display issue caused by your browser's cache. Try refreshing the page. Learn more about cache and cookies when using QuickBooks Online.

Why does my VAT return show a refund instead of a payment?

This means that QuickBooks is expecting a refund from HMRC. Review the transactions entered in QuickBooks prior to the filing period to see if this is incorrect.

This usually happens because HMRC has had a system outage or server issue. If HMRC has confirmed and accepted your submission, you can either leave the return as rejected in QuickBooks or contact support for help to unfile it. Once you have unfiled the submission, you can mark the period as filed in QuickBooks.

A "Rejected" status in QuickBooks means your submission to HMRC was unsuccessful. The period will still be marked as filed, and the next period's return will be available. You may be able to resubmit the return via the dropdown options. If the original information was incorrect, contact support to unfile the return, make corrections, and resubmit to HMRC.