Playing now

Playing now

The VAT Return has changed. Here’s what you need to know

Back to search results

As of the 2021/22 tax year, the way VAT Returns are worded has changed slightly.

This wording probably won’t change how you use the VAT Return, or the financial details you should report.

It’s simply a measure to introduce some clarity due to recent changes brought about by Brexit, such as postponed VAT accounting and the Northern Ireland Protocol.

In short, if you’re already producing correct VAT Returns in light of the above then there’s nothing to worry about. And if you use accounting software to prepare your VAT Returns then you may not even notice the changes.

But it’s important to be aware of what’s changed, and why.

And if you’re a VAT filer who continues to use the HMRC VAT portal website, you’ll notice the changes when you come to make your submission.

Note that if you’re a voluntary VAT payer, there are other changes that you should be aware of. Read this article to learn more.

When did the changes to the VAT Return happen?

They took effect from 8 April 2021.

This was to ensure the changes only impacted VAT Returns for the first full VAT period following the Brexit post-transition period.

Why has the VAT Return changed?

HMRC says it’s related to Brexit – and in particular, postponed VAT accounting for imports and the Northern Ireland Protocol.

To quote HMRC, the changes “ensure consistency” and “assist end-users by using plain language and clarifying the NI protocol”.

Which of the VAT Return box wordings has changed?

Boxes 2, 4, 8 and 9 have their labels and accompanying notes changed.

There are no changes to the labelling of boxes 1, 3, 5, 6 and 7.

What are the changes to the VAT Return box labels?

Here are the changes, listing the old vs the new label wording, and the notes provided by HMRC for each box on the VAT Return.

Remember that only boxes 2, 4, 8 and 9 have the label text changed, but below you’ll find listed the latest notes for all the boxes.

In some cases, these have also been adjusted to reflect post-Brexit changes like postponed VAT accounting.

Box 1

The label wording for this box on the VAT Return has not changed.

The notes provided by HMRC read as follows: “Include the VAT due on all goods and services you supplied in the period covered by the return. This does not include exports or dispatches as these are zero rated.

“Include the VAT due in this period on imports accounted for through postponed VAT accounting.”

Box 2

Old label wording: “VAT due in this period on acquisitions from other EC Member States.”

New label wording: “VAT due in the period on acquisitions of goods made in Northern Ireland from EU Member States.”

Notes from HMRC: “For goods moved under the Northern Ireland protocol only. Show the VAT due (but not paid) on all goods and related services you acquired in this period from EU Member States.”

Box 3

The label wording for this box on the VAT Return has not changed.

The notes provided by HMRC read as follows: “Show the total amount of the VAT due ie the sum of boxes 1 and 2. This is your total Output tax.”

Box 4

Old label wording: “VAT reclaimed in the period on purchases and other inputs (including acquisitions from the EU).”

New label wording: “VAT reclaimed in the period on purchases and other inputs (including acquisitions in Northern Ireland from EU member states).”

Notes from HMRC: “Show the total amount of deductible VAT charged on your business purchases. This is referred to as your ‘input VAT’ for the period. Include the VAT reclaimed in this period on imports accounted for through postponed VAT accounting.”

Box 5

The label wording for this box on the VAT Return has not changed.

The notes provided by HMRC read as follows: “Take the figures in boxes 3 and 4. Deduct the smaller from the larger and enter the difference in box 5.

“If this amount is under £1, you need not send any payment, nor will any repayment be made to you, but you must still fill in this form and send it to the address on page 1.”

Box 6

The label wording for this box on the VAT Return has not changed.

The notes provided by HMRC read as follows: “In box 6 show the value excluding VAT of your total outputs (supplies of goods and services). Include zero rated, exempt outputs and EU supplies from box 8.”

Box 7

The label wording for this box on the VAT Return has not changed.

The notes provided by HMRC read as follows: “In box 7 show the value excluding VAT of all your inputs (purchases of goods and services). Include zero rated, exempt inputs and EU acquisitions from box 9.”

Box 8

Old label wording: “Total value of all supplies of goods and related costs, excluding any VAT, to other EC Member States.”

New label wording: “Total value of dispatches of goods and related costs (excluding VAT) from Northern Ireland to EU Member States.”

Notes from HMRC: “In box 8 show the total value of all supplies of goods and related costs, excluding any VAT, to EU Member States from Northern Ireland.”

Box 9

Old label wording: “Total value of all acquisitions of goods and related costs, excluding any VAT, from other EC Member States.”

New label wording: “Total value of acquisitions of goods and related costs (excluding VAT) made in Northern Ireland from EU Member States.”

Notes from HMRC: “In box 9 show the total value of all acquisitions of goods and related costs, excluding any VAT, from EU Member States to Northern Ireland.”

Additional notes on the new VAT Return for Northern Ireland

In addition to the above changes, VAT Returns now list the following notes with relation only to the Northern Ireland Protocol: “Only use boxes 8 & 9 if you have supplied goods to or acquired goods from a EU Member State under the Northern Ireland protocol.

“Include related costs such as freight and insurance where these form part of the invoice or contract price. The figures should exclude VAT.

“You can find details of EU Member States in Notice 60 and Notice 725 or on our website at www.gov.uk/topic/business-tax/vat and at www.uktradeinfo.com under Intrastat.”

Final thoughts

A monumental change to VAT systems such as that brought about by Brexit was always going to require some adjustment.

VAT Returns would be caught up in this.

But it’s again important to emphasise that the phrasing changes outlined above mean little if you’ve already adjusted your VAT processes as a result of Brexit.

Your cloud accounting software will fill in the values automatically when you come to output your VAT Return, while any adjustments you need to make can continue to be applied in the existing way (again taking into account the changes brought about by Brexit).

Business after Brexit

Need help doing business post-Brexit? Get this free guide and discover what you need to know and do now.

Download your free guide
8,198 readers have downloaded this guide
8,198 readers have downloaded this guide

Never miss an episode

Subscribe by email and get Sound Advice delivered to your inbox every two weeks with the Sage Advice newsletter with a ton of related articles, templates and problem solving guides for small businesses so you can put our sound advice into practice.

Ask the author a question or share your advice

If you are a customer with a question about a product please visit our Help Centre where we answer customer queries about our products. When you leave a comment on this article, please note that if approved, it will be publicly available and visible at the bottom of the article on this blog. While your email address will not be publicly available, we will collect, store and use it, along with any other personal data you provide as part of your comment, to respond to your queries offline, provide you with customer support and send you information about our products and services as requested. For more information on how Sage uses and looks after your personal data and the data protection rights you have, please read our Privacy Policy.

Sage Advice Logo

Comments (1)

  • Have these changes actually been implemented in Sage?
    We run Sage 200 Manufacturing version 12.00.0027.
    We import to and from the EC (and the rest of the World) and we sell to Northern Ireland, Eire, the rest of the EC and Rest of the World.
    We do not import from Northern Ireland or Eire and we do have a VAT deferment account, for which we recover anything on form C79 in the usual way as part of box 4. Our last VAT return was to 30th April 2021 which was the normal VAT return, the same as pre-Brexit, so I am expecting these changes to be implemented in the next full return to 31 July 2021. However, when I look at the Current period VAT return to 31/7/21 the labels are the same and all the boxes are being completed exactly as before.
    Are we expected to make the changes ourselves to VAT codes, for example, EC imports, change the VAT rate from 20% to 0%, suppress anything appearing in boxes 2, 8 and 9 in the manual adjustments field and also reduce box 4 by whatever the system has put in box 2?