VAT questions worth asking before the deadline

Is the period complete?

Confirm that all relevant bank feeds, sales systems, purchase invoices, credit notes and expense records are up to date through the final day of the VAT period. Check for transactions sitting in draft, suspense or an uncategorised account.

Do the movements make sense?

A movement is not necessarily an error, but it should have a business explanation. Comparing the return with prior periods is a useful way to decide where to look more closely.

• How does sales VAT compare with the previous return and recent turnover?
• Are any unusually large purchases or sales supported by valid documents?
• Have credit notes and refunds been included in the correct period?
• Do zero-rated, reduced-rate and exempt transactions look reasonable for the business?
• Are imports, exports or overseas services present and properly reviewed?

Is there evidence for input VAT?

Recovering VAT normally depends on holding appropriate evidence and meeting the relevant conditions. A bank payment alone does not always show what was purchased, who supplied it or how VAT was charged.

Pay particular attention to entertainment, vehicles, mixed business and personal costs, fuel, home-working costs and any expenditure where recovery may be restricted. Ask for advice where the treatment is uncertain.

Has the payment been planned?

Review the likely liability before the filing deadline and make sure the business can fund it. If cash is tight, deal with the issue early. Do not alter a return simply to achieve a more convenient payment figure.

• Confirm the filing and payment deadlines.
• Check that HMRC payment details and authorisations are current.
• Retain the return, supporting reports and review notes.
• Correct identified errors using the appropriate HMRC process.