You need to read the below paragraphs to learn about how to file VAT returns in Xero. Here we proceed:
Firstly, go to settings choose general settings, and then go to the financial settings. And what we’re looking at is the vat section here. Now, You want to check that you’ve chosen the right vast scheme. The standard one is a cruel scheme the right VAT period would normally be quarterly and that your vat number has been input. Once you’re happy with all of that. You would just select save you only do that once but you would do it before you ever submit a VAT return in Xero.
Now, let’s look at submitting your VAT return you go to reports and you choose VAT return and then the quarter ending this date should be accurate. If it’s not you can change it. You want to tick the Box include VAT rate claims. That means if you missed anything in your last vat return it will be included if you make any changes here you would select update and then when you scroll down you will see your vat return and you Could go straight to file that time to submit it.
But we want to do a couple of further checks before we do that and these are very important.
- So the first check we need to do is to click on the tab that says VAT ordered the report and on this report, you will see every transaction that’s included in your vat return
- Now you check every single transaction on this report. They make sure that they are accurate and they’re correct. So you’re looking at Vat income and these are sales invoices. So, you know by looking at them. That is correct that you would claim VAT on these.
- Then we get to the VAT on expenses and these are purchase invoices or receipts. We scroll through them quickly and we say yes, we should be claiming VAT on these.
- Then Come to ABC electrical and there’s something in the back of my mind that sees ABC electrical are not vat registered. So there shouldn’t be VAT. So we want to check that so we can just click on the invoice to check it. And then what we will be going to do is to look at the backup document from ABC. There’s not much to this purchase invoice, but there’s enough to let me know that yes, it’s right that there is no VAT on that invoice.
- So now we will be going to amend the invoice and we can do it right here. So I’m going to choose Bill’s options. I’m going to choose edit. The unit price should be 360 and then going to choose Xero-rated expenses and then hit update.
- Now go straight back to where we were to the vat return and then back to the audit report. And now when we check it we got the transactions where we are claiming back the ATF, check them all. You know we have got ABC electrical with no VAT to claim back. So there’s not a lot here if you have a lot of transactions what I suggest is you scroll down you choose the export option and either export to Excel or Google Sheets depending on which one you use.
- So if we export to Google Sheets you clicked on the tab that says Beauty audit report, even though you couldn’t see that on your screen. And on this spreadsheet is just going to be easier to check transaction-by-transaction than looking at it on a screen. So say I want you to check every transaction no matter how many there are but you could check them very quickly to scan and down making sure they are here. It’s correct sales invoices with VAT to purchase invoices and receipts with.
- Then this section here is forty related items and there would also be a section for any transactions with no view. We want you to double-check your transactions. And now can we go to file that now will not just yet. Okay, we’ve had it back to that return with scroll down and we can see that according to the vat return the VAT amount we have to pay to each MRC is 810 pounds now. I want to check that a mind before I hit submit.
- So I’m going to go to the dashboard choose reports to choose trial balance. And then the date of Reverb’s return is the 30th of September. So I will choose that date and I will select an update. And on the trial balance, I want to go over to the right to the year-to-date figures. I’m scrolling down to the liability section and I’m looking at the view T of mine and the VAT. I might there is 810 reminder. We head back to Route return and it’s the same figure 810. So now I’m happy for you to go ahead with the green file.
- Now at this stage? We’ve checked the RV 80 settings are correct we have Checked how we’re happy with every transaction going through the vat report and we’ve checked that the balance agrees. Then and only then will we hit a file that now, we’re happy with the details that are there we choose file and publish
- Now you would fill in your government Gateway Login details and you would hit the final file and publish and that’s your vat return completed and Xero you will get notification from HMRC
- if you went to reports then all the reports again, Filed with HMRC that’s a section that would include all the reports that have been filed and accepted by HMRC.
- If we go to publish once the vat return has been completed. We will be able to find it there as well. So that is how you complete a vat return in Xero don’t be fooled into thinking it’s only five clicks. Make sure that your settings are accurate make sure that everything on your vat return is accurate and make sure that the balance is Don’t do these checks before you hit submit and you will be absolutely fine.