VAT accountant in Kent

VAT returns under Making Tax Digital

Quarterly returns are prepared and filed from Xero through MTD. Each one is due one month and seven days after the quarter ends, and the payment on the same date. Before filing I check:

• bank, card and platform accounts are reconciled for the quarter;
• input VAT in Box 4 is backed by the right evidence: a valid VAT invoice (for purchases of £250 or less, a simplified or retailer’s invoice that shows the required details is acceptable), a C79 certificate or postponed import VAT statement for imports, and the supplier’s invoice for reverse-charge services;
• reverse-charge entries appear in both Box 1 and Box 4;
• sales and costs are in the right quarter for your VAT accounting scheme: by tax point under standard accounting, or by the date of payment under the Cash Accounting Scheme.

Margin scheme and Global Accounting

On second-hand goods, VAT is one-sixth of your margin, not 20% of the sale. Buy a car for £8,000, sell it for £10,400: VAT is £2,400 ÷ 6 = £400.

• Standard margin scheme: item by item, with a stock book. Loss-making items give no relief. Cars, vans and motorbikes go here.
• Global Accounting: VAT on total eligible sales minus total eligible purchases each period, for items costing £500 or less. No vehicles.
• Imports: goods you import yourself are not eligible for either, unless they are works of art, antiques or collectors’ items.

Worked examples: Global Accounting and the margin scheme.

BCA and auction fees

The auction invoice decides what goes into the purchase price.

Putting a fee into the purchase price and also reclaiming its VAT counts it twice. More detail in the car dealership handover checklist, and for full dealer accounts see car dealership accounting.

EU sales: OSS and IOSS

The One Stop Shop schemes let a business report the VAT due in EU countries on one return instead of registering in each country. Which scheme applies, and where you register, depends on what you sell, where the goods are when you sell them and where the business is established.

• Union OSS: distance sales of goods from Northern Ireland to consumers in the EU. The business registers with HMRC itself (an agent can’t register for it), and returns are quarterly.
• Non-Union OSS: services supplied to consumers in the EU by a business established outside the EU, including in Great Britain. You register in one EU country of your choice, and returns are quarterly.
• IOSS: low-value goods imported to consumers in the EU or Northern Ireland, in consignments of £135 or less under HMRC’s scheme (€150 under the EU’s). Returns are monthly. Businesses in Northern Ireland or Norway can register with HMRC directly. A business in Great Britain can register with HMRC through an intermediary, which HMRC has allowed since 1 April 2026, or register in an EU country, which may also mean appointing an EU-established intermediary.

If you sell low-value goods only through an online marketplace, the marketplace normally accounts for that VAT instead. Goods sent from Great Britain to consumers in Northern Ireland stay on your UK VAT return.

Reverse charge

When a VAT-registered business buys services from abroad, such as advertising from an Irish entity or marketplace fees from Luxembourg, it usually accounts for the VAT itself.

Services from abroad. £1,000 of overseas ad spend: £200 in Box 1, £200 in Box 4 if you can recover it, and £1,000 in both Box 6 and Box 7. Net nil if you can recover it in full, but missing it misstates the return. If you’re not yet registered, services you would have to reverse charge count towards the £90,000 threshold.

Construction services under CIS. The domestic reverse charge is entered differently. A VAT-registered contractor buying £1,000 of reverse-charge building work from a subcontractor puts £200 in Box 1, £200 in Box 4 if recoverable, and £1,000 in Box 7 only. The purchase does not go in Box 6. The subcontractor shows the £1,000 in Box 6 and charges no VAT. The reverse charge doesn’t apply when the customer has told the supplier in writing that it is an end user or intermediary supplier, or when the customer isn’t VAT and CIS registered, such as a householder. Reverse-charge supplies can’t be accounted for under the Cash Accounting Scheme.

VAT prices

Fees are shown per month whatever the return frequency: OSS returns are quarterly and IOSS returns monthly. Registering for VAT in another country is a separate one-off fee on the price list.

VAT work sits on top of a bookkeeping or compliance package, because a return is only as good as the books behind it. See the full price list. For general bookkeeping, payroll and year-end in Maidstone, see accountant in Maidstone.

Sources

HMRC guidance on GOV.UK, checked 27 October 2026:

• Check how to tell HMRC about VAT Return errors (VAT652 withdrawn, 8 September 2025)
• How to correct VAT errors (VAT Notice 700/45), section 4
• Register for VAT: when to register
• Check if you can register for the VAT Import One Stop Shop scheme
• Using an intermediary for the VAT Import One Stop Shop scheme (updated 13 August 2026)
• Register to report and pay VAT on distance sales of goods from Northern Ireland to the EU
• How to fill in and submit your VAT Return (VAT Notice 700/12), section 4.6
• VAT domestic reverse charge technical guide
• VAT guide (VAT Notice 700), sections 16.6 and 19.5
• Cash Accounting Scheme (VAT Notice 731)
• Applying for an exemption from Making Tax Digital for VAT
• Buying second-hand vehicles using a VAT margin scheme

European Commission: Declare and pay OSS.