The Flat Rate VAT Return

The Flat Rate VAT Return in Xero shows the VAT amount your organisation owes to HMRC under the VAT Flat Rate scheme. The Flat Rate VAT Return will only be generated in Xero if you have chosen a flat rate VAT scheme in your financial settings.

If you use a standard VAT reporting scheme, see The VAT Return.

Before you start

Before you run your Flat Rate VAT Return, we recommend you:

  • Check you've entered all transactions for the return period, for example, all invoices, bills, credit notes, and manual journals.
  • Run the Bank Reconciliation Summary report for all bank accounts as at the end of your VAT Return period. Check all bank accounts are reconciled at that date.
  • Generate the General Ledger report and check it for any exceptions.
  • If this is your first VAT Return in Xero, in your Financial Settings check your VAT details are correct.
  • If this isn't your first VAT Return in Xero, check you've published all previous periods' returns in date order so you can include late VAT claims on your new return.

Run your VAT Return

  1. In the Reports menu, select All Reports.
  2. Under Tax, click VAT Return.
  3. Select the return date.
  4. Enter the Flat Rate Percentage for your organisation.
  5. (Optional, but not recommended) Unselect the checkbox to exclude VAT Late Claims.
  6. Click Update.

    Image of Flat Rate VAT return

  7. Review the return. See how Xero populates the boxes on the Flat Rate VAT Return.
  8. Either:

Adviser review

You can choose to ask your accountant or bookkeeper to review the VAT Return before you publish in Xero, or file with HMRC.

  1. In the green window at the top of your return, click ask your adviser to review this return.

    Image showing link to ask adviser to review.

  2. Complete the email and select a user in your organisation who has the Adviser user role. They can then log in to your organisation to review your VAT Return.

    Request VAT Return review from adviser.

  3. Click Send.

Xero saves the return on the Reports Drafts tab.

Flat rate adjustment required to balance the VAT Account

When there's a difference between the VAT to pay on this return and the balance of your VAT account, when you publish the return Xero creates a journal for the amount of the difference.

Image showing adjustment amount.

Export and print the Flat Rate VAT Return

Depending on your user role, you can export the VAT Return to Microsoft Excel, PDF or Google Sheets formats. You can also print directly from your browser.

When you export your VAT Return to PDF, Microsoft Excel or Google Sheets, the VAT Audit Report is included. In Microsoft Excel and Google Sheets, each report displays on a separate tab.

What's next

Publish the VAT Return and file with HMRC