What is a VAT return?

A VAT return is specifically designed to report the Value Added Tax (VAT) that a business has collected and the VAT that it is eligible to reclaim. This form is submitted to HM Revenue and Customs (HMRC) and typically covers a specific accounting period, which can be quarterly or annually, depending on the business's VAT scheme. The return details the total sales and purchases, the VAT charged on sales, and the VAT paid on purchases. By providing this information, businesses can ensure they are accurately conveying their VAT obligations, whether they owe money to HMRC or are entitled to a refund.

The focus of the VAT return is solely on VAT transactions; therefore, it does not include income tax liabilities, payroll information, or sales revenue calculations directly. This specificity makes the VAT return distinct and critical for managing VAT compliance within UK taxation frameworks.