Understanding VAT Quarters for 2024 in the UK

VAT quarters are the periods within a financial year when businesses must submit their VAT returns to HM Revenue and Customs (HMRC). For many businesses in the UK, the VAT quarters are a critical part of their financial planning and compliance.

What Are VAT Quarters?

VAT quarters divide the financial year into four segments, each requiring a separate VAT return. These returns report the VAT a business has charged on sales and paid on purchases, ensuring that the correct amount of VAT is paid to or reclaimed from HMRC. Businesses are assigned VAT quarters based on their VAT registration date.

Standard VAT Quarters

Most businesses will follow one of three standard VAT quarter schedules. Each quarter must be followed by a return, which is due one month and seven days after the end of the quarter.

  1. Quarter Ending March, June, September, December
    • First Quarter: January 1 – March 31
    • Second Quarter: April 1 – June 30
    • Third Quarter: July 1 – September 30
    • Fourth Quarter: October 1 – December 31
    • Return Due Dates: May 7, August 7, November 7, February 7
  2. Quarter Ending April, July, October, January
    • First Quarter: February 1 – April 30
    • Second Quarter: May 1 – July 31
    • Third Quarter: August 1 – October 31
    • Fourth Quarter: November 1 – January 31
    • Return Due Dates: June 7, September 7, December 7, March 7
  3. Quarter Ending February, May, August, November
    • First Quarter: December 1 – February 28/29
    • Second Quarter: March 1 – May 31
    • Third Quarter: June 1 – August 31
    • Fourth Quarter: September 1 – November 30
    • Return Due Dates: April 7, July 7, October 7, January 7

Key Considerations for 2024

  1. Making Tax Digital (MTD): All VAT-registered businesses are required to use MTD-compatible software to keep digital records and submit their VAT returns. This requirement simplifies the process and helps reduce errors.
  2. Penalties for Late Submission: HMRC imposes penalties for late submission of VAT returns. It is crucial to ensure that all returns are submitted on time to avoid fines. The due date is one month and seven days after the end of the VAT quarter.
  3. Quarterly Adjustments: Businesses should be aware of any adjustments that might be required in their quarterly returns, such as corrections from previous periods or changes in VAT rates.
  4. Annual Accounting Scheme: Some businesses might be eligible for the Annual Accounting Scheme, which allows them to submit one VAT return per year instead of quarterly returns. However, they still need to make advance payments towards their VAT bill throughout the year.

Practical Tips for Managing VAT Quarters

  • Use Reliable Accounting Software: Ensure that your accounting software is MTD-compliant and capable of generating accurate VAT returns.
  • Set Reminders: Mark the VAT return deadlines in your calendar to avoid missing submission dates.
  • Regular Reconciliation: Regularly reconcile your accounts to ensure that all transactions are recorded accurately and any discrepancies are addressed promptly.
  • Seek Professional Advice: If you are unsure about any aspect of your VAT returns, consider consulting with a tax professional or accountant.

For more detailed information, you can visit the official HMRC VAT guidance. This resource provides comprehensive details on VAT returns, including how to register, submit, and manage your VAT returns effectively.