VAT is the bane of many small and medium sized business owners lives.
A tax that has recently celebrated its 40th birthday, VAT was introduced as a simple affair and has, over the years become increasingly complicated for business owners. Meeting your VAT obligations includes demonstrating that your VAT records are complete and up to date as well as working out the VAT that you are due to pay (or reclaim from) HMRC. These actions, in addition to presenting the figures you’ve reported to HMRC if you happen to get a VAT visit are challenging tasks for most businesses.
Xero bookkeeping is the perfect tool to simplify your entire VAT accounting process and to make your business life easier in general. In fact, the Xero VAT system now even lets you file your VAT returns with HMRC at the click of a single button. Anyone who is assigned either the Financial Adviser or the Standard User role can carry out this task, and it couldn’t be more straightforward. There are two ways to file your VAT return using Xero. First, you can publish your return in Xero and then file it with HMRC via the Government Gateway or you can file it online.
Here’s how filing your VAT return online works:
- Before you start, make sure you have your HMRC online filing ID and password to hand.
- Then make sure you have entered a standard VAT reporting period in the Xero system under the title Financial Settings.
- When you have prepared your VAT return in Xero, all you need to do is click the green button at the bottom of the screen which says File VAT Now. This will take you to the screen which will then show you your draft VAT return.
- Once you’re happy that the draft return is correct and ready to go, you simply need to click the File and Publish button at the bottom of the page, which will give rise to the chance to enter your Gateway User ID and password before finally filing and publishing the return.
It really couldn’t be simpler. Four easy steps and your VAT filing with HMRC is done. You can even check the status of returns you’ve already filed with them, enabling you to see whether your return has been processed by HMRC or whether it is still pending. Once your return is filed successfully, you’ll receive an IRmark and an ID number in your Xero inbox, which is your confirmation that your return has been successfully filed.
With this sort of system available to small and medium-sized businesses at a surprisingly affordable price, there truly is no reason to continue to allow VAT filing to keep you awake at night. What’s more, once you know that your VAT obligations have been well catered for; you’ll have more time to focus on the really important things in your business, like winning more clients and looking after your existing clients.
If you’d like to discuss the value that Xero’s online VAT filing system could bring your business, why not get in touch?