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Early VAT return

The client's VAT period ends on October 31st and there will be a large repayment due to the client. He wants to submit the VAT return now in the belief this will get the repayment to him early.  I expect the VAT return will be held over until the 1st November before it is processed and there is a risk it might be considered incorrect if October's input VAT (as yet unknown) is omitted.  Should I wait until 31st October before submitting or do what the client wants and submit it now ?


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Leaving aside the input tax for October, what about the output tax for October?

Why has this repayment suddenly arisen? Is your client a repayment trader? Are they voluntarily registered? If they're a compulsorarily registered repayment trader they can apply to make monthly returns, speeding up repayments.

If the return proves to overstate the amount of repayment that is due, then a penalty will be charged as your client will have failed to take reasonable care.

With respect to the input tax that won't have been claimed on this VAT return, presumably it will be claimed on the next VAT return.  Strictly, input VAT should be claimed for the period in which the trader gets the VAT invoice (under Reg 29), so technically, the next quarter's VAT return will be overclaiming that input VAT, and a penalty could be charged, consequent on the same failure to take reasonable care.

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23rd Sep 2011 21:00

More info !

The client is converting a shop into a restaurant and so far there is no output VAT, just input VAT from the architect, ciivil engineers, builder, etc.    The VAT repayments will cease once the restaurant is completed and trading commences.

The builder's invoices for August and September are very large and the idea behind the early VAT return is solely to gain a cash flow advantage.

Setting aside the issue of reasonable care in claiming the I/O VAT in the correct period, will an early claim accelerate the repayment ?

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By DMGbus
24th Sep 2011 08:21

Will HMRC accept the return? or reject the return?

I can't recall seeing a case where I've submitted a VAT return prior to the return end date.

I think that HMRC might have grounds to reject it as there's an argument that it is likely to be incomplete.

I suppose that it's worth a try though - I can NOT see it delaying the repayment.


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30th Sep 2011 16:40

In these circumstamces, HMRC

In these circumstances, HMRC should accept it however, you are correct that they will not process it until after the due date.

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