Is Your VAT Return Right?

How confident do you feel when you upload your information? Is your VAT return right when you press that ‘submit’ button?

We’ve all been submitting vat returns online for some years now, through the gateway, albeit with information generated elsewhere.

Making Tax Digital is now live, where real time accounts information is submitted from your accounting software direct to HMRC. And August 2019 marks the first online filing deadline after the introduction of the new system in April this year.

Yet, according to a survey by QuickBooks, only a quarter (27%) of businesses are confident that the figures which they submit are in fact accurate.

Is Your VAT Return Right?

Their survey of 500 small businesses in the UK found that, on average, 86 minutes was spent in checking figures before the final ‘send’ button was pressed.

It also highlighted that half of the respondents (51%) believe that they have made errors in their submissions, despite spending an average of 86 minutes in checking the figures.

Many of the errors were in HMRCs favour, with 9% more businesses overpaying rather than underpaying. In fact 27% who had overpaid had received refunds from HMRC.

Impact of VAT Errors on Cash Flow

Clearly this can have an impact on cash flow in the business.

To mitigate against VAT errors, QuickBooks has developed a free add-on tool to check for the most common errors. Duplicate invoices and expenses and inconsistent tax codes are some of the things it checks for.

The new Making Tax Digital legislation is in part driving improvements in the use of technology for accounting. With a deadline imposed by HMRC all businesses have been pushed into improving outdated systems. But there’s no doubt that once the transition is made, technology does offer many advantages to a business.

Now QuickBooks has launched SmartScan into the market, no doubt the other cloud accounting providers will follow. Especially as the add-on has the potential of improving accuracy and reducing anxiety around VAT filing.

Too Many Hats

We’ve said it before, that small business owners wear so many hats. It’s easy to spend too much time working in your business, rather than working on it. Don’t forget that we offer an in-house bookkeeping service here at Jones Harris, if it’s one routine task that you could do without.

And of course if you’ve got any queries just get in touch for a no-obligation chat.

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