What is a quarterly VAT return and what should UK and Irish businesses watch for?

A quarterly VAT return is a periodic report submitted to the tax authority summarising:

• VAT collected on sales (output VAT),
• VAT paid on purchases (input VAT),
• The net VAT payable or reclaimable for the period.

Businesses file VAT returns in many jurisdictions on a quarterly cadence (though frequency depends on local rules and the business’s circumstances). The mechanics are similar across the UK and Ireland: you’re reconciling VAT charged to customers and VAT incurred on allowable costs, based on invoices and supporting records.

What makes VAT returns tricky?

VAT reporting problems rarely come from the arithmetic. They come from:

• Incorrect VAT codes on invoices (standard vs reduced vs zero-rated vs exempt vs out of scope).
• Timing and cut-off errors (posting to the wrong period).
• Incomplete purchase capture (missing supplier invoices or credit notes).
• Mixed-use purchases where VAT recovery is restricted.
• Cross-border rules (services vs goods, place of supply issues, exports).

That’s why consistent transaction coding and a clear audit trail are essential. A good VAT process ensures each transaction has:

• the right VAT treatment
• the right evidence (invoice/credit note)
• and is posted to the correct date and entity

How finance teams reduce VAT risk

Common controls include:

• Standardised VAT codes and locked-down tax logic in systems
• Exception reporting (e.g., unusual VAT rates, manual overrides)
• VAT reconciliations to the ledger and bank
• Review of high-risk categories (entertainment, motor, cross-border services)

If your organisation operates across multiple entities, VAT becomes even more sensitive—because you can have different registrations, thresholds, or treatments across the group.

A note on “rates”

VAT rates and classifications can vary by jurisdiction and by item. The UK government guidance sets out how different VAT rates apply to goods and services, and Ireland’s Revenue also describes when the zero rate applies.

1. What’s the difference between zero-rated and exempt?
   Zero-rated supplies are taxable at 0%; exempt supplies are not taxable. This distinction affects VAT recovery eligibility and reporting.
2. Why do VAT returns fail “sanity checks”?
   Usually because VAT codes were applied inconsistently, or because the VAT return doesn’t reconcile to the general ledger.
3. Do credit notes matter?
   Yes—credit notes adjust VAT and must be included in the correct period.

Find out how AccountsIQ simplifies group VAT.