VAT & Tax
How to prepare your books for a VAT return
A step-by-step checklist for preparing UK bookkeeping records before a VAT return, from reconciliation to review and submission.
Before you look at the return
Most VAT problems are bookkeeping problems. Work through the records first, then the return becomes a review rather than an investigation.
- Reconcile all bank and card accounts for the period
- Ensure purchase invoices are captured and attached
- Review transactions posted with no VAT code or an unusual code
- Check treatment of expenses that commonly cause errors, such as entertaining and vehicle costs
- Reconcile the VAT control account
Review before submission
Compare the return to prior periods. A large unexplained movement in either direction usually points to a coding or cut-off issue rather than a genuine trading change.
Keep records digital
Keeping VAT records inside cloud accounting software maintains a traceable digital record and makes queries far easier to answer later.
Key takeaways
- Reconcile bank, card and VAT accounts before reviewing the VAT return.
- Check purchase invoices, VAT codes and common expense treatments for errors.
- Compare the current VAT return with previous periods to identify unusual movements.