VAT report - What is a VAT report?
A VAT report is a financial document that summarises a company’s VAT-eligible transactions over a specified accounting period, helping the company complete their VAT Return.
If a company is registered for VAT, they must charge VAT on eligible sales (output VAT) and can reclaim the VAT on any purchases made by the business (input VAT).
However, rather than paying and reclaiming VAT from HMRC after each sale or purchase, businesses submit a VAT Return at the end of each accounting period to declare how much VAT they should pay or reclaim for the specified period.
A VAT report supports the VAT Return process by listing all of the information related to a company’s input and output VAT and calculating the overall amount of VAT the business should pay or reclaim from HMRC.
How to fill in a VAT report
VAT reports should contain nine boxes that correspond to specific parts of the VAT Return process.
If you use invoicing and accounting software to create automatic VAT reports, your software will use the data in your account to automatically calculate the value of each box.
Box 1: VAT due in the period on sales and other outputs
This box includes all of the output VAT due on the goods and services you sold throughout the quarter. This shouldn’t include any VAT on credit notes which you’ve issued to customers, or zero-rated exports or supplies.
Box 2: VAT due in the period on acquisitions of goods made in Northern Ireland from EU Member States
Box 2 should include all the VAT due on goods from other EC member states, as well as any related costs such as delivery, packaging, or insurance.
From January 1st 2021, this only applies to EU - Northern Ireland acquisition of goods.
Box 3: total VAT due
By adding the figures from boxes 1 and 2, box 3 shows the total VAT you owe HMRC for the period. This is your ‘output VAT’ or ‘output tax’.
Box 4: VAT reclaimed in the period on purchases and other inputs
Box 4 shows your ‘input VAT’ – the total amount of VAT paid on purchases made by your business. You should only include purchases that can be supported by a VAT invoice, and you must not include any purchases intended for business entertainment or solely for personal use.
Box 5: net VAT to be paid or reclaimed from HMRC
Box 5 is the total amount of VAT you owe or are owed, which is calculated using your input and output VAT. If your output tax (box 3) is higher than your input tax (box 4), you must pay the difference to HMRC. If your input tax is higher than your output tax, HMRC will refund the difference.
Box 6: total sales and outputs, excluding VAT
This box may include outputs such as zero-rate or exempt supplies, exports and reverse charge transactions. However, you shouldn’t include loans, insurance claims, dividends or money put into the business by yourself or other partners.
Box 7: purchases and other inputs, excluding VAT
In box 7, you should include the value of imports, purchases from VAT-registered suppliers in other EC member states (Northern Ireland only), and reverse charge transactions. You shouldn’t include wages, salaries, PAYE, or National Insurance contributions.
Box 8: supplies of goods and related costs, excluding any VAT, from Northern Ireland to EU Member States made from 1 January 2021
This is the total of all goods supplied to EU member states (from Northern Ireland only), as well as any directly related costs that were included in the contract or invoice such as shipping or freight costs. You shouldn’t include supplies of services related to the supply of goods.
Box 9: acquisitions of goods and related costs, excluding any VAT, from EU Member States to Northern Ireland made from 1st January 2021
The final box should show the total value of any goods purchased from VAT-registered suppliers in EU countries (Northern Ireland only), as well as any directly related costs.
VAT reports and VAT accounting schemes
If your business uses certain VAT accounting schemes, you may need to follow different rules when creating a VAT report. For example:
Annual Accounting VAT Scheme
Usually, businesses need to complete VAT Returns on a quarterly basis, meaning that they need to create four VAT reports per year. However, businesses registered under this scheme only need to submit a VAT Return on an annual basis and therefore only pay or reclaim VAT once a year.
Cash Accounting VAT scheme
If your business uses the Cash Accounting VAT Scheme, the figures recorded in your VAT report should be based on when you receive or make payments, rather than when you raise or receive invoices.