Vat owed.

I have a new startup business. I am not yet sending quotes or invoices, still buying stock, yet I've received a vat bill from hmrc. I was expecting to get a refund, not a bill. I am using xero. All purchases I have paid vat.

You have to submit VAT returns every quarter (every 3 months), your quarters will have been explained to you on your VAT certificate/correspondance from HMRC when you were issued with your VAT number. Even if you have not made any sales, then you should still submit a VAT return, albeit a Nil return (or more likely a VAT return showing Nil sales but £x of purchases of which you want to reclaim input tax on). If you are using Xero then you should ensure your Xero software has your VAT registration number, registration date and connected up to HMRC gateway for MTD purposes, that way, Xero will then remind you when the returns are due. Once you file your VAT return, any estimated assessment/VAT bill that HMRC has issued will be cancelled, but you will have incurred 1 penalty point for not filing your VAT return on time, once you reach 4 penalty points there is a £200 fixed penalty, so please ensure you are filing VAT returns in future to avoid this penalty.

Thanks for answer, my return deadline was end of December and I did have vat with xero. It's since been sorted out. Just couldn't work out why I had vat bill before return was due. Thanks anyway.

Hi,
You will need to contact our VAT team so that we can look in to your records to identify the VAT position:
VAT: general enquiries
Thank you.