At JacRox, we prepare and submit VAT returns for UK businesses using Xero. We check the figures, fix any errors before filing, and make sure you’re claiming back everything you’re entitled to. We’re Xero Gold Partners based in Manchester.
How VAT returns work in Xero
Xero calculates your VAT automatically from the transactions you enter. Every invoice you raise, every bill you record, every bank transaction you reconcile – Xero applies the correct VAT rate and keeps a running total.
When it’s time to file, Xero pulls together your output tax (VAT you’ve charged customers) and input tax (VAT you’ve paid on purchases). The difference is what you owe HMRC, or what HMRC owes you.
The return itself covers nine boxes – the standard HMRC VAT return format. Xero fills these in automatically from your data. You review, we check, and then submit directly to HMRC from within Xero. No spreadsheets, no manual calculations.
Making Tax Digital (MTD) and Xero
Xero is fully MTD-compliant. It’s on HMRC’s list of recognised software for MTD for VAT, and it handles the digital link requirement (your accounting records must flow digitally into your return – no retyping numbers from a spreadsheet).
If you’re still using spreadsheets or older software that isn’t MTD-ready, switching to Xero sorts the compliance problem and gives you better accounting tools at the same time. We can handle the migration for you.
VAT schemes explained
The standard VAT scheme isn’t the only option. Depending on your business, one of these might save you money or simplify your accounting:
- Flat Rate Scheme – You pay a fixed percentage of your turnover as VAT instead of tracking input and output tax separately. Good for businesses with low expenses. The rate depends on your industry (e.g. 14.5% for computer services, 12% for management consultancy).
- Cash Accounting Scheme – You only account for VAT when money changes hands, not when you issue an invoice. Helpful if customers pay slowly.
- Annual Accounting Scheme – File one VAT return per year instead of four, with interim payments based on your estimated liability.
Xero supports all these schemes. We’ll tell you which one suits your business and set it up correctly.
The current VAT threshold
You must register for VAT if your taxable turnover exceeds 90,000 in any rolling 12-month period (as of April 2024). You can also register voluntarily below this threshold, which makes sense if you sell mainly to VAT-registered businesses or want to reclaim VAT on startup costs.
Once registered, you’ll need to file returns and pay any VAT due. Late filing means penalties – HMRC uses a points-based system where each late return adds a point, and hitting the threshold triggers a 200 fine.
What we do for you
- Review your transactions – We check that VAT has been applied correctly to every invoice, bill, and expense before filing.
- Fix errors – Wrong VAT rates, exempt items coded as standard-rated, missing receipts. We catch these before HMRC does.
- Submit to HMRC – We file your MTD VAT return directly from Xero to HMRC. You get a confirmation number as proof.
- Payment reminder – We tell you exactly how much you owe and when it’s due. No surprises.
Common VAT questions
Can I do my own VAT returns?
Technically yes, if your Xero data is clean. But mistakes are expensive – HMRC charges interest on underpayments and can open an enquiry if your figures look wrong. Most of our clients find the cost of having us check and file is far less than the risk of getting it wrong.
What if I’ve made a mistake on a previous return?
If the error is under 10,000 (or under 1% of your turnover up to 50,000), you can correct it on your next return. Larger errors need a separate disclosure to HMRC. We handle both.
What does it cost?
Our VAT return service starts from 75 + VAT per quarter for a straightforward business. The fee depends on transaction volume and whether we handle your day-to-day bookkeeping. Monthly filing is available if you prefer.
Get started
Call us on 0161 832 4451 or book a free consultation. We’ll review your current VAT setup, check you’re on the right scheme, and give you a fixed quote.
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