Yes. There is no legal requirement to use an accountant for VAT, and for a large number of small businesses doing it yourself is the right call.
The honest answer has a second half. VAT is the tax where a straightforward business can file its own returns for years without a problem, and a slightly less straightforward one can get it wrong every quarter without noticing. Knowing which you are is the whole decision.
What you are actually taking on
Filing your own VAT return means owning all of this:
- Digital record-keeping under Making Tax Digital, which applies to every VAT-registered business unless exempt
- Digital links between any software you use, with no copy and paste anywhere in the chain
- Compatible software that submits through HMRC’s API — the manual web form route no longer exists
- The nine boxes, correctly populated, including the ones that catch reverse charges and scale charges
- The deadline — one calendar month and 7 days after your period ends, for both return and payment
- The consequences — a penalty point per late return, £200 once you hit the threshold, and up to 100% of any tax under-stated or over-claimed
None of that is beyond a competent business owner. It is a few hours a quarter once the setup is right.
Where DIY works
| Your situation | DIY verdict |
|---|---|
| All sales standard-rated, all customers UK | Works well |
| Modest transaction volume, one bank account | Works well |
| Cloud accounting connected to your bank feed | Works well |
| Flat Rate Scheme with a single sector rate | Works well — the calculation is deliberately simple |
| No exempt income, no imports, no subcontractors | Works well |
| You reconcile the bank monthly, not at the deadline | Works well |
The common thread is uniformity. If every sale carries 20% VAT, every purchase invoice shows VAT you can reclaim in full, and nothing crosses a border, the return is close to mechanical.
The Flat Rate Scheme simplifies things further — you can join if your VAT taxable turnover will be £150,000 or less excluding VAT in the next 12 months, and you pay a fixed percentage of gross turnover rather than tracking input tax on every purchase. You must leave at £230,000 including VAT.
Where DIY goes wrong
Five areas account for most errors on returns prepared in-house. All five are invisible to the software — it will happily submit the wrong number.
Partial exemption
If you make both taxable and exempt supplies your business is partly exempt, and you cannot reclaim input VAT attributable to the exempt side. Property income, financial services, insurance, education and healthcare are the usual triggers.
There is a de minimis let-out: you can still recover input tax attributable to exempt supplies if it is no more than £625 a month on average and no more than half your total input tax. Above that you apportion quarterly, with an annual adjustment.
Software does not know you are partly exempt. Nothing flags it and the return submits looking entirely normal.
Reverse charges
Reverse charge transactions go in two boxes at once — you account for the VAT as if you were the supplier in box 1 and reclaim it in box 4, with the net value in boxes 6 and 7.
The domestic reverse charge for construction services catches subcontractors and main contractors in CIS. Services bought from overseas suppliers — software, advertising, consultancy — catch almost everyone. If your Google or Meta invoices show no VAT, that is a reverse charge, not a zero-rated purchase.
Mixed-rate supplies
Reduced-rate at 5% and zero-rated at 0% are not the same thing as exempt or out of scope, and confusing them shifts figures between boxes.
Where you make a mixed-rate supply for a single inclusive price — a meal deal with a zero-rated sandwich and standard-rated crisps — you can record the total value and total output tax rather than splitting the sale, but the apportionment still has to be right. Food, construction, energy, printed matter and children’s goods are all rate minefields.
Import VAT and postponed VAT accounting
Import VAT can be declared and reclaimed on the same return under postponed VAT accounting, which is what most importers use. You pull your monthly postponed import VAT statement from HMRC and enter the figures.
The errors are consistent: forgetting the statement, entering the same import twice because the freight agent’s invoice also showed VAT, or claiming import VAT without a C79 certificate.
Blocked input tax
VAT on business entertainment is blocked. VAT on buying a car is blocked unless it falls into a narrow set of exceptions, and 50% is blocked on leasing a qualifying car. VAT on second-hand margin scheme goods cannot be reclaimed at all.
Cloud software will happily code a client lunch to “entertaining” with 20% VAT recovered. Nothing stops it.
What it costs, either way
| Route | Typical cost |
|---|---|
| Xero | From £16/month excluding VAT |
| FreeAgent | £33/month excluding VAT — free for NatWest, RBS and Ulster Bank business account holders |
| QuickBooks | Entry-level plans start in a similar bracket; promotional rates are common, so check before committing |
| Bridging software for a spreadsheet | Low annual cost, but you still own the record-keeping and the review |
| SmartFiling MTD VAT filing | Fixed fee |
Software is the floor, not the total. Whichever route you take you need compatible software, so the real comparison is your time and risk against a filing fee — not software against an accountant.
Time is the underrated cost. A clean quarter takes a couple of hours. Unpicking a duplicated supplier feed, or working out whether a subcontractor invoice should have carried the reverse charge, takes far longer — right as the deadline closes in.
What a mistake actually costs
This is the number that should drive the decision.
| Failure | Cost |
|---|---|
| Inaccurate return | Up to 100% of tax under-stated or over-claimed |
| Late return at the points threshold | £200, then £200 per subsequent late return |
| VAT paid 16–30 days late | 3% of the VAT outstanding at day 15 |
| VAT paid 31+ days late | 3% at day 15 + 3% at day 30, plus a daily charge at 10% a year |
| Any late payment | Interest at 7.75% from day one |
An over-claim of £4,000 a year on blocked entertainment and car VAT, found on a compliance check four years later, is £16,000 of tax plus penalties plus interest. That is the scenario worth insuring against — not the risk of putting a number in the wrong box once.
The honest recommendation
Do it yourself if your supplies are all one rate, your customers and suppliers are UK-based, your bookkeeping is current, and nothing on the list above applies.
Get help if you are partly exempt, work in construction, import, sell across VAT rates, or have never had anyone check whether your treatment is right. A one-off review of a single quarter usually settles it either way.
Frequently asked questions
Do I need an accountant to file a VAT return?
No. There is no legal requirement to use an accountant. You do need Making Tax Digital compatible software, because VAT returns must be submitted through HMRC’s API rather than typed into a website.
How long does a DIY VAT return take?
A clean quarter with connected bank feeds and a single VAT rate takes a couple of hours, most of it reviewing rather than entering. Quarters involving reverse charges, imports or partial exemption take considerably longer, and the time is usually spent working out the right treatment rather than doing the arithmetic.
What are the most common VAT return mistakes?
Reclaiming VAT on business entertainment or on a car where it is blocked, missing the reverse charge on services bought from overseas suppliers, ignoring partial exemption, double-counting import VAT, and confusing zero-rated with exempt supplies.
Is the Flat Rate Scheme easier to do myself?
Generally yes, because you pay a fixed percentage of gross turnover rather than tracking input tax on every purchase. You can join if your VAT taxable turnover will be £150,000 or less excluding VAT in the next 12 months, and you must leave once turnover reaches £230,000 including VAT. Whether it saves you money is a separate question from whether it is simpler.
What happens if I get my VAT return wrong?
Small net errors — £10,000 or less, or under £50,000 and less than 1% of your box 6 sales — can be adjusted on your next return. Larger and deliberate errors must be reported to HMRC separately. HMRC can charge a penalty of up to 100% of any tax under-stated or over-claimed.
Deciding without guessing
If none of the five problem areas above applied, file it yourself — paying someone would buy reassurance rather than expertise.
If one of them did apply, get a second opinion before the next deadline rather than after a compliance check. SmartFiling files MTD VAT returns on a fixed fee, working directly in Xero, QuickBooks or FreeAgent, with every return reviewed and signed off by an ICAEW Chartered Accountant. It is all online, with no requirement to get on a call.
