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10 best VAT return features in accounting software
For UK businesses, filing VAT returns is a constant obligation, but it doesn't have to be a complex process. Using the correct accounting software can help you stay completely compliant with HMRC, minimise errors, and make filing VAT returns easier. Knowing what features are most important to you is the first step in selecting the best tool for your needs.
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This guide explains the best VAT return features in accounting software that every business owner should look for before committing to a platform.
1. MTD-ready and HMRC integration
Any modern VAT accounting software must support Making Tax Digital (MTD). It should connect directly to HMRC’s system for submitting VAT returns. This removes the need for manual uploads or bridging tools.
A built-in HMRC integration ensures that your VAT returns are sent securely and automatically, providing complete digital compliance while saving time on manual tasks.
2. Automatic VAT calculation
Software that automatically calculates VAT saves hours of work and prevents small mistakes that can lead to penalties. It should accurately calculate VAT liabilities and reclaimable amounts for each transaction.
The system must handle multiple VAT rates, including standard, reduced, zero, and exempt, across various products and industries. Accurate, automated VAT totals are a key indicator of a reliable VAT-ready accounting tool.
3. support for multiple VAT schemes
Not all businesses follow the same VAT structure. Good software supports all major UK schemes, including:
- Standard VAT
- Flat Rate Scheme (FRS)
- Cash Accounting Scheme
- Margin Scheme (for second-hand goods)
- Retail Schemes
Having flexibility across VAT schemes allows your software to adapt as your business evolves.
4. Real-time VAT dashboard
A live VAT dashboard provides instant visibility into your VAT position, eliminating the need to wait for quarter-end summaries.
You should see at a glance:
- Total VAT collected on sales
- VAT paid on purchases
- Net VAT due or reclaimable
This feature is helpful for both predicting liability and preparing finances for deadlines. Small and medium-sized businesses often utilise real-time VAT tracking to prevent last-minute surprises.
5. Error detection and warnings
HMRC compliance problems can arise from even a small entry error. Trusted software should recognise and notify you of errors such as:
- Duplicate invoices
- Missing receipts
- Incorrect VAT codes
- Non-reconciled transactions
- Out-of-scope VAT entries
These built-in checks ensure that your data remains clean and your returns are accurate.
6. One-click VAT filing
Filing should be quick and straightforward. Look for software that allows one-click VAT submission once your data is ready.
Features to expect include:
- Pre-filled VAT 100 return forms
- Automatic submission to HMRC
- Quick receipt confirmation
Small business owners benefit from less manual labour and the assurance that their returns are always filed accurately.
7. Secure digital record-keeping
MTD rules require digital record-keeping for a minimum of six years. The software you choose should store VAT records safely, with options to:
- Back up data digitally
- Log user activities
- Retrieve old submissions easily
A strong audit trail builds trust and makes HMRC inspections less stressful.
8. Custom VAT codes and flexibility
If your business operates across regions or sells specialised products, your software should allow custom VAT codes.
This helps apply the correct Tax logic based on:
- Product or service type
- Customer location
- Business sector
A flexible VAT setup ensures accurate reporting across multiple sales channels, helping to avoid compliance issues.
9. Multi-currency & international VAT handling
Software that facilitates multi-currency VAT management is essential for companies engaged in international trade. It should:
- Manage VAT rates in the EU and outside of it
- Use the appropriate exchange rates
- Handle OSS, IOSS, or reverse charge reports
Companies expanding overseas should use systems that support international VAT compliance and accurate currency conversions.
10. Accountant collaboration tools
Both business owners and accountants are frequently required to participate in VAT filing software. The program needs to promote collaboration by:
- Access by multiple users
- Role-based authorisation
- Shared notes or dashboards
Because of these features, review sessions are quicker and more transparent as there is no need for back-and-forth emails.
Mobile VAT management
In 2025, mobility is critical. Accounting software with a mobile app should let users:
- Scan invoices or receipts for VAT tagging
- Review pending VAT obligations
- File returns securely on the go
By removing the need for excessive emails, review sessions become quicker and more transparent.
Insights and live reporting
The best software solutions also provide real-time VAT analytics beyond filing. Timely VAT reports will clarify spending patterns, estimate liabilities, and provide insights into business performance.
The ability to export or visualise this data supports better financial decision-making and proactive Tax planning.
Why these features matter
Selecting VAT-ready accounting software isn’t only about compliance — it’s about running a smoother, more efficient business. Each of the above features contributes to:
- Lower risk of HMRC errors
- Faster VAT return filing
- Transparent financial reporting
- Long-term scalability
When software addresses these essentials, VAT filing becomes a background task rather than a quarterly source of stress.
Final thoughts
The best VAT return features simplify compliance, improve accuracy, and free up time for what matters most — running your business. Suppose your current system lacks any of these functions. In that case, it may be time to switch to a modern, fully compliant platform that supports automated filing, intelligent reporting, and long-term growth.
Disclaimer: Our blogs and articles are written to share general information only. If you’re looking for an easy way to submit your VAT under Making Tax Digital (MTD), SwiftVATPro offers a simple and reliable online solution.
Frequently Asked Questions:
Your Questions – Answered ,We’re here to help you with anything VAT-related.
1. What are the best VAT return features to look for in accounting software?
Choose accuracy, automation, and HMRC compatibility when using VAT return software. The ideal platform should automatically calculate VAT based on your invoices and expenses, which reduces the risk of errors.
It should support Making Tax Digital (MTD) requirements so that you can submit VAT returns straight to HMRC. Having secure online storage, up-to-date information, and access for multiple users makes it much easier to work with remote teams or external accountants.
Reporting tools that generate detailed summaries and track VAT obligations make filing easier and more transparent. Finally, look for intuitive dashboards and simple navigation to save time and ensure smoother record management every quarter.
2. How does digital VAT return filing help small businesses?
Submitting VAT returns digitally removes the need for paperwork and manual calculations. It helps small businesses stay organised, minimises mistakes, and keeps submissions on track with HMRC deadlines.
Using VAT-ready accounting software also means calculations are done automatically, saving hours of administrative work. It allows business owners to view obligations, liabilities, and payment history in one platform.
With cloud-based VAT systems, accountants can work on your records in real time, helping expanding businesses keep finances organised and plan confidently. It’s a secure, modern approach that meets HMRC’s digital rules while reducing the unnecessary pressure on small business owners.
3. Why is HMRC-recognised software important for VAT filing?
HMRC-recognised VAT software is designed to meet Making Tax Digital requirements set by the UK government. Instead of uploading files manually, the software securely sends your VAT data directly to HMRC’s platform.
Using non-approved software can lead to rejected returns or compliance issues. HMRC-recognised tools also receive regular updates to stay aligned with changing Tax regulations, so users don’t have to track technical updates themselves.
This gives businesses confidence that their returns are accurate, traceable, and fully compliant — a key factor for smooth operations and avoiding penalties.
4. Can I manage multiple VAT accounts using one accounting software?
Yes. Most advanced accounting tools allow you to switch between different VAT-registered businesses from one dashboard, making day-to-day management easier for accountants and multi-business owners.
You can assign different users, track obligations for each VAT number, and generate separate reports. Centralising VAT management helps prevent missed deadlines and reduces confusion between accounts.
The software organises VAT records for each business, helping maintain compliance across different VAT registrations. This saves time and avoids confusion for growing organisations with multiple departments.
5. What kind of reports should VAT-ready accounting software provide?
Reliable VAT-ready software should include clear reporting tools that simplify both compliance and financial review. Key reports usually cover VAT summaries, detailed transaction records, liability calculations, and proof of submitted payments.
Easy report sharing with accountants is a useful feature that helps reduce back-and-forth and save time. Certain platforms also include analysis tools that highlight expense patterns and support better cash flow planning.
Having these reports readily available ensures transparency during audits and allows better decision-making for future VAT periods. A well-designed reporting dashboard ultimately saves time and helps business owners maintain full control over their Tax records.