UK VAT Quarterly Return Estimator

Yes — this tool is for businesses that are already registered for UK VAT. You must register once your taxable turnover exceeds the £90,000 rolling 12-month threshold (raised from £85,000 on 1 April 2024). If you're below that threshold you don't need to register (though you can volunteer to), and this tool doesn't apply. If you're unsure whether you need to register, use HMRC's online VAT registration eligibility checker at gov.uk.

The Flat Rate Scheme (FRS) lets you pay HMRC a single fixed percentage of your gross (VAT-inclusive) turnover, rather than calculating the difference between output and input VAT each quarter. You still charge customers the standard 20% VAT, but pay HMRC only your sector's flat rate (e.g. 7.5% for retail). The difference is yours to keep — it can be a significant cash benefit for businesses with low input VAT. You can use FRS if your annual VAT-exclusive taxable turnover is £150,000 or less. Under FRS you generally cannot reclaim input VAT on everyday purchases, only on individual capital assets costing £2,000 or more including VAT. FRS is worth modelling if your business materials spend is low relative to your sales.

Log in to Etsy → Shop Manager → Finances → Payment Account. Under "Sales", set the date range to match your VAT quarter (e.g. 1 April – 30 June). Your quarterly net sales figure is the total item sales revenue excluding VAT — Etsy shows amounts net of VAT for UK VAT-registered sellers who have provided their VAT number. If you're not sure which amount to use, export the Payment Account CSV: the "Item Subtotal" column gives sales before Etsy fees; Etsy's fees (which include VAT at 20%) should be claimed separately as input VAT in Box 4.

Input VAT is the VAT you were charged by VAT-registered UK suppliers on goods and services you bought for your business. For an Etsy seller this typically includes: materials and supplies purchased from VAT-registered UK suppliers, packaging, equipment (printers, computers, sewing machines), professional services (accountant, designer), Etsy's own fees if they include VAT. You need a valid VAT invoice from each supplier to reclaim input VAT. Under the standard scheme you reclaim all input VAT. Under FRS you can only reclaim input VAT on capital assets costing £2,000 or more including VAT — enter £0 for regular expenses.

Box 1 is the total output VAT you charged your customers. Box 4 is the total input VAT you paid to your suppliers. HMRC only needs the net: if you collected £2,000 in VAT from customers but already paid £600 in VAT to suppliers, you remit the £1,400 difference (Box 5). The logic protects you from paying tax on the same thing twice — VAT is designed to be paid once, at the final consumer. You're collecting it on HMRC's behalf, so you get to offset what you've already paid upstream.

For most businesses with standard quarterly periods, returns and payments are both due one calendar month and 7 days after the end of the VAT period — so a quarter ending 30 June has a 7 August deadline. Most businesses are set up for quarterly periods aligned to the calendar year (Jan–Mar, Apr–Jun, Jul–Sep, Oct–Dec) or offset by a month or two. Check your VAT registration confirmation letter or your Business Tax Account on gov.uk for your exact quarter dates. Payments made via online banking (Faster Payments) must clear by the deadline; Direct Debit is taken 3 working days after the deadline.

It depends on your registration status. If you are NOT VAT-registered: Etsy collects and remits UK VAT (20%) on your sales to UK buyers as a marketplace facilitator — you receive your sale price minus Etsy's fees, with no VAT obligation. If you ARE VAT-registered: Etsy should not be collecting UK VAT on your listings once you provide your VAT number in Shop Manager → Finances → VAT. You then account for the output VAT on UK sales in your own VAT return (that's Box 1 in this tool). Always confirm the setup in your Etsy account; if Etsy is still collecting UK VAT on your registered account, contact Etsy support immediately.

Box 8 (total value of goods supplied to EU member states) and Box 9 (total value of goods acquired from EU member states) were used under EU VAT rules before Brexit. Since the UK left the EU Single Market on 1 January 2021, UK businesses no longer make intra-EU acquisitions or dispatches in the VAT sense. Goods now move as imports and exports, handled via import VAT and customs declarations — not through Boxes 8 and 9. For the vast majority of UK Etsy sellers, these boxes remain £0. If you move goods between Great Britain and Northern Ireland (which is under different VAT rules), Box 8/9 entries may apply; consult a tax advisor.