I have been submitting my VAT returns for some time to HMRC via quickfile without problem. Recently I’ve signed up clients that are outside of the UK so VAT is not applicable on their invoices. Invoices have been raised with VAT zero rated and paid but when I submit the VAT return via reports it is sending the wrong amount. Can anyone tell me (a very non-technical person) what I’m doing wrong?
HMRC are demanding the full VAT payment based on the return but I’ve only just realised the VAT return amounts for the last 2 submissions were incorrect. Any ideas what I can do? Thanks
Normally zero rated invoices would only affect box 6, not the actual vat due in box 1, unless you’re on the flat rate scheme. If you are on flat rate you should talk to your accountant about whether it is still sensible for you to use flat rate now you’re making more zero rated sales - HMRC themselves state that
As exempt and zero rate supplies are included in your flat rate turnover you apply the flat rate percentage to the exempt and zero rate turnover. You may pay more VAT by being on the scheme if these supplies are a larger proportion of your business turnover than the average for your trade sector.