Should you submit a VAT return online or via an accountant?

VAT returns can be complex matters and e-commerce businesses have more moving parts than most other business types. The nature of your business means you need to potentially account for international transactions, seller fees, and other less straightforward items. You could submit a VAT return online directly, but it is safer to do so through an accountant.

As an e-commerce entrepreneur, we know it’s a fine line balancing what you should outsource, and what you should do yourself. There are only so many hours in the day and yet, outsourcing costs can add up. It can be hard to know what is worth spending time on and tackling yourself versus what you should outsource, but an incorrect, or even unoptimized, VAT return can cost you in the long-term.

The requirement to submit VAT returns online or through an accountant

If your e-commerce business has (or will have) a taxable turnover of more than £85,000 in 2022/23 then you must register for VAT. Additionally, you can register voluntarily to make your e-commerce business appear more professional and established. Registering ahead of time also reduces stress and admin when registration becomes mandatory.

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Once registered, you must submit returns as required (usually quarterly) and failure to do so in a timely fashion can lead to penalties.

Why do I need an accountant to submit a VAT return online?

While you may think e-commerce VAT returns are as simple as inputting 20 per cent of all transactions, that is both incorrect and likely to lead you short-changed. VAT rules are complex and include items at 5 per cent and 0 per cent. Items such as free gifts or samples and Shopify fees all need to be accounted for correctly, and these are just the tip of the VAT iceberg.

Accounting for VAT can be much more intricate for e-commerce businesses and yet many business owners continue to get flustered each quarter rather than choosing an accountant.

When you outsource your VAT return to an accountant, you can trust it will be submitted accurately and on time. What’s more, you will be gifted back precious time to spend focused on more creative areas of the business.

Take control of your VAT returns

Whichever path you go down, make sure your VAT Returns are dealt with early. Leaving them to the last minute increases the risk of mistakes that you could otherwise avoid. If you are using an accountant, make sure all the relevant data is with them with plenty of time if they do not have access to your accounts system, especially if the systems require time to set up. If they share your data, as we do with our clients, make sure your data is up to date-and correct.

Not only does getting your VAT return in early put you at ease but there are also many other advantages of doing so. When you complete your VAT return early, you get your tax rebate faster, you can budget better, and you give yourself time to correct and spot mistakes.

If you do decide to complete your VAT return early, you may choose to get an accountant to double-check your work. Making sure you have put in the hours in advance ensures you have enough time to take these extra measures before the submission day.

Decide on your VAT scheme

Choosing your VAT scheme can make a difference to your business and is not a decision to be made or taken lightly. Although you can amend this at a later date, it is prudent to discuss which is the best path for the future success of your e-commerce business with your accountant before the decision is made.

It is important to settle on the right VAT scheme for your business. There are four VAT schemes to choose from and consider. They are all different and which is best depends on your business type, needs, and requirements.

E-commerce accounting and submitting VAT returns
Brooke Cagle

A potential saving and peace of mind

If you submit VAT returns online, you may incorrectly account for vital transactions that can decrease your VAT bill. Using an accountant may seem like an added expense but they may well end up paying for themselves through specialist knowledge as well as tax-savings advice etc. and in the meantime you have the added peace of mind knowing your returns are filed promptly and in accordance with legislation such as Making Tax Digital.

Although it may sound like another thing to do, outsourcing to an e-commerce accountant really does hold a world of benefits for your business. Don’t risk overpaying (or underpaying) your VAT and hand over your accounts to a specialised e-commerce accountant.

Next steps

If you are looking for help submitting your VAT return, we can ensure you get everything you are entitled to. Whether your e-commerce business is the UK only or spanning the globe, we will optimise your VAT returns using our in-depth e-commerce knowledge. Get in touch today to discuss your needs with one of our team.

The best time to start is now.

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