A beginner's guide: Your first VAT return submission
Filing your first VAT return can feel daunting. It marks the moment your business starts formal VAT reporting with HMRC. This guide explains what to include, which pre-registration costs you can claim, and how to manage your first VAT return submission with confidence.
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Filing your first VAT return is a significant milestone. It means your business is now officially registered with HMRC and you’re starting to take on your Tax responsibilities. At the same time, it’s normal to feel unsure about the process. Many business owners wonder what details they need to include, whether pre-registration expenses can be claimed, or how to handle things if HMRC conducts a closer review of their return.
Why the first VAT return submission feels complicated
- You may have more purchases than sales if you have recently set up your business.
- You can reclaim VAT on some costs from before you registered.
- HMRC carefully checks the first returns to confirm the business is genuine.
What a VAT return actually is
A VAT return reports three main things to HMRC:
- The VAT you charged on sales
- The VAT you paid on business expenses
- The difference between the two
If you collected more VAT than you paid, you send the difference to HMRC. If you paid more than you collected, HMRC sends you a repayment. Most businesses file quarterly.
Since the Making Tax Digital (MTD) rules came into force, VAT returns must be submitted using approved software. Paper forms and manual entries on the HMRC website are no longer accepted.
Steps to prepare for your first VAT return submission
Before you sit down to file, make sure you have:
- Your VAT number and HMRC login details
- Digital records of invoices and receipts
- Your VAT quarter dates (set by HMRC when you register)
- Bank account details if you expect a repayment
Keeping everything organised throughout the quarter makes filing much easier. Approved MTD software can store invoices, track totals, and show how much VAT you are likely to owe or reclaim, so you are not rushing at the last minute.
Filing your first VAT return submission
Sales VAT
Declare VAT charged on every invoice. For example, if you billed a client £2,000 plus 20% VAT, the £400 VAT must be included in your return.
Purchase VAT
Reclaim VAT paid on business expenses. Common examples include:
- A new office desk costing £300 plus £60 VAT
- A software subscription billed at £50 plus £10 VAT each month
- Marketing or advertising services with VAT added
Pre-registration costs
HMRC allows VAT claims on some expenses made before you registered:
- Goods up to 4 years old, as long as they are still in use (for example, office furniture, computers, stock)
- Services up to 6 months old, if related to your business setup (for example, website design or consultancy)
Example: If you bought office chairs 2 years ago and still use them, you can reclaim the VAT on those chairs in your first return. If you paid for a one-off training course eight months ago, that service is outside the 6-month limit and cannot be reclaimed.
Submitting the return
Once your totals are ready, submit them through HMRC-approved MTD software. The software calculates final figures, sends the return to HMRC, and confirms receipt.
Common mistakes in your first VAT return submission
It’s easy to make errors on the first return. The most common ones are:
- Missing the deadline — filing late may lead to penalties under HMRC’s points system
- Claiming ineligible VAT — for example, services older than 6 months or personal expenses
- Mixing business and personal costs — only expenses used entirely for the business are valid
- Misclassifying items — renovation work may feel like goods but could be treated as a service
- Not storing records digitally — MTD requires digital record-keeping, not just paper files
Staying organised reduces mistakes. Approved software can flag unusual entries and ensure your figures add up correctly before submission.
What happens after your first VAT return submission
- Copies of invoices and receipts
- Contracts or lease agreements
- Evidence of genuine trading activity
Why skipping VAT checks is risky
Skipping VAT checks might seem quicker, but it can cause real problems. HMRC could refuse your VAT claims if a number isn’t valid, and you might get penalties for sending invoices with wrong details.
It can also hurt your reputation; partners may hesitate to work with you if your paperwork isn’t reliable. On top of that, it increases the chances of an HMRC audit. For online sellers and fast-growing businesses, these minor oversights can turn into costly issues.
Do you need help, or can you file alone
You don’t always need an accountant for VAT. Many small businesses file their own returns, especially using approved digital tools. Accountants remain valid for complex transactions, but for straightforward returns, approved software is often enough.
Software examples are available that help prepare and submit VAT returns without specialist knowledge, while ensuring your records comply with MTD rules.
Related reading
This guide covers the basics of your first VAT return. For a more detailed look at how MTD rules apply in 2025, see our complete guide: How to File VAT Returns with MTD in 2025.
Final thought
Frequently Asked Questions:
Your Questions – Answered ,We’re here to help you with anything VAT-related.
1. What information do I need before starting my first VAT return submission?
Make sure your bookkeeping system is up-to-date, whether you use software or manual spreadsheets. HMRC requires accurate records of both output VAT (the VAT you charge customers) and input VAT (the VAT you pay on purchases). You’ll also need access to your Government Gateway account, since VAT returns are now filed online under Making Tax Digital (MTD).
Having these documents prepared in advance prevents errors and delays. Many first-time filers underestimate how detailed the process can be, so organizing your records early will make your first VAT return submission faster, easier, and far less stressful.
2. How do I file my first VAT return online with HMRC?
To file your first VAT return submission, log in to your Government Gateway account and access the VAT section. Since HMRC requires digital filing under Making Tax Digital (MTD), you’ll need compatible accounting software or a recognized MTD bridging tool.
Enter the relevant figures: total sales, VAT charged, purchases, VAT paid, and any reclaimable input VAT. The software automatically calculates the net VAT you owe or can reclaim. Once the information is submitted, HMRC processes it, and you’ll receive a confirmation notice.
Please remember to pay your VAT bill by the deadline in your account; if not, penalties may be applicable. For first-time filers, it’s wise to double-check each figure before hitting submit. Your first VAT return submission may feel overwhelming, but using the right digital tools ensures compliance and reduces the chance of making costly mistakes.
3. What mistakes should I avoid in my first VAT return submission?
Many beginners make minor but costly errors during their first VAT return submission. A common mistake is forgetting to record all eligible input VAT, which means you miss out on reclaiming money owed to your business. Another frequent issue is mixing exempt or zero-rated sales with standard-rated sales, which can result in miscalculated VAT figures.
Businesses also sometimes submit inaccurate data because their bookkeeping isn’t updated regularly. Missing the submission deadline is another pitfall that can result in penalties. To avoid these problems, keep your accounts accurate, separate personal and business expenses, and use VAT-compliant accounting software.
It’s also recommended to reconcile your accounts monthly rather than waiting until the end of the VAT period. Double-checking figures before submitting ensures that your first VAT return submission goes smoothly, keeping you compliant with HMRC while also saving your business time, stress, and money in the long run.
4. Can I reclaim VAT in my first VAT return submission?
Yes, you can reclaim VAT during your first VAT return submission if you have paid VAT on purchases or expenses related to your business. This includes goods and services used for business purposes, such as office equipment, raw materials, or utilities.
In some cases, you can also reclaim VAT on pre-registration expenses and purchases made before registering for VAT, provided they meet HMRC’s conditions. For example, you can usually reclaim VAT on goods bought up to four years before registration if they’re still used in your business.
Services are typically reclaimable if purchased within six months before registration. To claim input VAT, you must have valid VAT invoices or receipts. Proper record-keeping is essential since HMRC may request evidence. By understanding these rules, your first VAT return submission can actually help recover costs, giving your business a welcome financial boost.
5. What happens after I submit my first VAT return?
Once you complete your first VAT return submission, HMRC will process the figures. If you owe VAT, you must pay it by the due date shown in your account. If your input VAT (purchases) is higher than your output VAT (sales), you may be entitled to a VAT refund.
HMRC usually processes refunds within 10 working days; however, it may take longer if it decides to review your return. After submission, it’s essential to keep a digital copy of the return and maintain your records for at least six years, as HMRC may request an audit.
Many first-time filers believe the process ends once they press the “submit” button, but compliance is an ongoing process. To ensure you don’t miss future deadlines, setting reminders is a good practice. With good organization, your first VAT return submission becomes the start of a smoother routine for all future VAT reporting periods.
