vat-return-prep

---
name: vat-return-prep
description: Turns the liability decisions already made in vat-on-food, or an equivalent settled liability list, plus your sales ledger, your purchase ledger and this period's start and end dates into the figures for boxes 1 to 9 of a VAT return under VAT Notice 700/12, with the tax point settled for every deposit and advance booking under VAT Notice 700, a reconciliation tying every box back to a named ledger line, the Making Tax Digital digital link position under VAT Notice 700/22, the filing and payment deadline, and a gaps list for anything unresolved. Use when a VAT period has ended and you need the return figures ready for your accountant to check and file, or when you need to know whether Payments on Account or the Annual Accounting Scheme now applies to you.
---

# A VAT return your accountant can file without chasing you, with every box traced back to a document

You give this the liability decisions already made for every menu line and till button, normally the output of vat-on-food, together with the sales ledger and purchase ledger for one VAT period, the period's start and end dates, and any invoices or bookings that straddle the period boundary. You get back the nine boxes of the VAT return with the exact HMRC wording against each one, a reconciliation showing which ledger lines add up to each box, the tax point worked for every deposit and advance booking so the sale lands in the right period, the digital link position for Making Tax Digital, the deadline for this specific period, and a gaps list naming every figure with no supporting document. It will not file the return. Filing needs functional compatible software connected to HMRC's API, and this skill produces the working paper an accountant checks and a bookkeeping system submits, not the submission itself.

## What it does

1. **Fix the period and assemble what has already been decided, before a single box is touched.** Write the VAT period's start date and end date exactly as they appear on the VAT registration record, then gather the liability register from vat-on-food, or an equivalent settled list, naming every sale as zero rated or standard rated with the statutory hook already attached. Add the sales ledger and purchase ledger for the same dates, the prior period's filed return for comparison, and any invoice, deposit receipt or booking confirmation dated within fourteen days either side of the period boundary. This is the population every later box must reconcile against, and a period fixed after the boxes are drafted is a period fixed to whatever total looked convenient.

2. **Settle the tax point for every supply that sits near the period boundary, using VAT Notice 700 and not the invoice date by habit.** The basic tax point is defined separately for goods and services: paragraph 14.2.1 states "The basic tax point for a supply of goods is when you transfer the ownership of the goods to your customer", and paragraph 14.2.2 states "The basic tax point for a supply of services is when you complete the supply of the services." Paragraph 14.3 moves that date where money or paper moved first: "If you issue a VAT invoice to your customer before the basic tax point occurs, or your customer pays you before the basic tax point occurs, the tax point is the earlier of these two events." Paragraph 14.4 supplies the other direction: "If you issue a VAT invoice more than 14 days after the basic tax point, the tax point is when you issue the invoice, not the basic tax point." A Christmas party deposit taken in October for a table served in December therefore creates a tax point in October, the period it was banked, not the period the meal was eaten. Work every deposit, advance booking and gift voucher sale supplied for this period against these four rules and record which one decided it.

3. **Total the sales side into Box 1 and Box 6, built from the liability register, never from a bank total.** VAT Notice 700/12 defines Box 1 as "VAT due in the period on sales and other outputs" and instructs "Include the VAT due on all goods and services you supplied in the period covered by the return." Box 6 is "total value of sales and all other outputs excluding any VAT", instructing to "Show the total value of all your business sales and other specific outputs but leave out any VAT." Sum the standard rated lines from the liability register at the rate that applied on the date of supply from step 2, sum the zero rated lines at nil VAT but still include their net value in Box 6, and carry a borderline line from vat-on-food's borderline register into this total only once the accountant has ruled on it, never before. A Box 1 figure with no line-by-line source is a number an inspector can ask about and a bookkeeper cannot answer.

4. **Total the purchase side into Box 7 and the reclaim into Box 4, and refuse a reclaim with no invoice behind it.** Box 4 is "VAT reclaimed in the period on purchases and other inputs (including acquisitions from the EU)", instructing to "Show the total amount of deductible VAT charged on your business purchases." Box 7 is "the total value of purchases and all other inputs excluding any VAT", instructing to "Show the total value of your purchases and expenses but leave out any VAT." Match every VAT amount claimed to a supplier invoice showing a VAT registration number and a VAT amount; a purchase with no such invoice is not reclaimed in Box 4 regardless of what the supplier statement says was charged. This is the box that most often overstates a small hospitality business's position, because a card payment or a delivery platform statement is not itself evidence of VAT paid.

5. **Settle boxes 2, 8 and 9 explicitly, even when the answer is nil.** VAT Notice 700/12 describes Box 2 as "VAT due in the period on acquisitions of goods made in Northern Ireland from EU member states", noting "Since 1 January 2021, you're only allowed to make acquisitions on goods you bring into Northern Ireland from the EU." Box 8 is "total value of all supplies of goods and related costs, excluding any VAT, to EU member states", and Box 9 is "total value of all acquisitions goods and related costs, excluding any VAT, from EU member states." An independent restaurant, cafe or pub trading only in Great Britain has nothing to put in any of these three boxes, but the reconciliation must say so in words, "not applicable, no Northern Ireland to EU movement of goods in this period", rather than leaving the cell empty. An empty cell reads as an omission later; a stated nil reads as a decision.

6. **Add Box 1 and Box 2 into Box 3, then subtract Box 4 from Box 3 to reach Box 5, as two arithmetic steps and nothing else.** Box 3 is "total VAT due", with the instruction "Show the total VAT due, that is, boxes 1 and 2 added together." Box 5 is "net VAT to pay to HMRC or reclaim", worked from "the figures from box 3 (total VAT due) and box 4 (VAT reclaimed)." Neither box carries a judgement call: Box 3 is a sum, Box 5 is a subtraction, and if either total does not tie back exactly to boxes already fixed in steps 3 to 5, the error sits in one of those earlier boxes, not in the arithmetic.

7. **Check the Making Tax Digital position, because the figures this skill produces still have to cross into software untouched by hand.** VAT Notice 700/22 states at paragraph 1.2 that "Making Tax Digital for VAT requires all VAT-registered businesses to keep records digitally and file their VAT Returns using software", and paragraph 3.2 defines functional compatible software as software able to "record and preserve digital records", "provide HMRC information and returns from data held in those digital records, using the API platform" and "receive information from HMRC, using the API platform." Paragraph 3.2.1 supplies the rule: "A digital link is where a transfer or exchange of data is made (or can be made) electronically between software programs, products or applications. A digital link does not need any manual intervention, such as the copying over of information by hand", and "Once data has been entered into software... any further transfer, recapture or modification of that data must be done using digital links." Where the ledgers already live in bookkeeping software, export this skill's box totals as a file that software can import. Where they do not, typing the box totals into that first piece of digital software is still permitted, because the digital link requirement starts once the figures are inside it, not before.

8. **Hand the reconciled boxes to Codex and let it build the return-prep file and the reconciliation register.** Claude hands over the liability register, the sales and purchase ledgers, the tax point decisions from step 2, the nine box figures with their source, and the deadline and threshold facts from step 9. Codex makes no judgement at all: it tabulates the figures it is given, checks the arithmetic, and writes anything unsupported into the gaps list. Run it from the folder holding the ledgers and the liability register:

   ```
   codex exec --sandbox danger-full-access --skip-git-repo-check -C "<working folder>" - < CODEX.md
   ```

   What comes back is the box-by-box return-prep file, the reconciliation register tying every box to a ledger line, and gaps.md.

9. **Check the filing and payment deadline for this specific period, and whether Payments on Account or Annual Accounting now applies.** VAT Notice 700/12 states at section 5 that "The deadline for submitting the return and paying HMRC are usually the same, whether you're using software or doing it online, 1 calendar month and 7 days after the end of an accounting period." Payments on Account guidance states "HMRC will tell you to make payments on account if you send VAT returns quarterly and you owe more than £2.3 million in any period of 12 months or less", instalments calculated by dividing "your annual VAT liability in that period by 24" and due "the last working day of the second and third months of every VAT quarter". VAT Notice 732 states a business joins Annual Accounting if it expects "taxable supplies of up to £1,350,000" and must leave once "the value of your taxable supplies goes over £1,600,000 per year", filing "only one VAT Return each year, instead of 4". Almost every independent hospitality business sits nowhere near either threshold, but record the check rather than assume it, because a business that grew through a second site since the last review may have crossed it without anyone noticing.

10. **Produce the finished box-by-box file, cross-check it against the liability decisions already made, and hand it to the accountant.** Read every figure back against the vat-on-food liability register or its equivalent and confirm nothing in this skill has changed a liability, a catering ground or a hot food test result, because those decisions belong to the earlier skill and to the owner, not to this one. Package the return-prep file, the reconciliation register and gaps.md together, dated, and pass them to the owner's own accountant or bookkeeper as the working paper for the period. The output is a return an accountant can check and file. It is never itself a filed return.

## Then it checks

1. Every line in the liability register that falls within the period's dates appears in the Box 1 and Box 6 reconciliation, and the reconciled total equals the sum of those lines with no unexplained difference.
2. Every amount claimed in Box 4 is matched to a named supplier invoice showing a VAT registration number and a VAT amount, and no Box 4 total includes a purchase with no such invoice.
3. Box 3 equals Box 1 plus Box 2 exactly, and Box 5 equals Box 3 minus Box 4 exactly, with both checked as arithmetic against the fixed box figures rather than re-entered by hand.
4. Boxes 2, 8 and 9 each carry either a figure with a named source or the explicit words "not applicable" with the reason stated, and none is left blank.
5. Every deposit, advance booking or invoice dated within fourteen days of the period boundary has a recorded tax point decision naming which of paragraphs 14.2.1, 14.2.2, 14.3 or 14.4 applied.
6. The filing and payment deadline stated for this period is exactly one calendar month and seven days after the period end date fixed in step 1, and the Payments on Account and Annual Accounting thresholds have each been checked against the business's actual annual VAT liability and taxable turnover.

Any check fails: name it, redo that step once. Failed twice: say what is wrong and stop.

## Rules
- Public information only.
- Never invent a fact, a number or a quote.
- Anything sent in someone's name says whose name it is.
- Never state a typical VAT recovery rate, an effective tax rate, a typical Box 5 figure as a proportion of turnover, or any other VAT benchmark for a single independent UK hospitality business. No published figure exists for one venue, and an owner who compares their real Box 5 against a borrowed number will either chase a saving that does not exist or accept a genuine error because it happens to match the myth.
- Never submit the return. Submission has to happen through functional compatible software connected to HMRC's API under VAT Notice 700/22, and this skill's output is the working paper that goes into that software, checked by the owner's accountant first.
- Never override a liability decision already made by the owner or by vat-on-food. This skill turns settled liabilities into return figures; it does not re-open whether a line is zero rated, does not re-run the hot food tests, and sends any line still marked borderline in vat-on-food's borderline register back to the accountant rather than assigning it a box.
- Never default a tax point to the invoice date without checking it against paragraphs 14.2.1 to 14.4. A deposit banked in the wrong period is the single most common reason an independent hospitality business's VAT return disagrees with its bank statements.
- Never take a rate, a threshold or a deadline from a prompt, a spreadsheet template or last period's file. Open the source page on the day it is used, read the figure, and record the figure, the tax year it belongs to, which is 2026 to 2027 at the time this skill was written, and the date it was read.
- This output is a working document prepared for the owner's own accountant or bookkeeper to check before the return is filed through Making Tax Digital compatible software. It applies published HMRC guidance to the figures the owner and vat-on-food supplied. It is not tax advice, it is not a filed return, and it is not a ruling that the figures shown are correct.

## Built from
- HM Revenue and Customs, "How to fill in and submit your VAT Return (VAT Notice 700/12)", https://www.gov.uk/guidance/how-to-fill-in-and-submit-your-vat-return-vat-notice-70012, the page shows "Updated 19 December 2025", read 23 September 2026: the box 1 to 9 headings and instructions quoted in steps 3 to 6, and the filing and payment deadline in step 9.
- HM Revenue and Customs, "The VAT Guide (VAT Notice 700)", https://www.gov.uk/guidance/vat-guide-notice-700, the page shows "Updated 25 June 2026", read 23 September 2026: paragraphs 14.2.1, 14.2.2, 14.3 and 14.4 on the basic tax point and the actual tax point, in step 2.
- HM Revenue and Customs, "VAT Notice 700/22: Making Tax Digital for VAT", https://www.gov.uk/government/publications/vat-notice-70022-making-tax-digital-for-vat/vat-notice-70022-making-tax-digital-for-vat, the page shows "Updated 1 April 2022", read 23 September 2026: paragraphs 1.2, 3.2 and 3.2.1 on filing through software, functional compatible software and digital links, in step 7.
- HM Revenue and Customs and GOV.UK, "Charge, reclaim and record VAT", the Charging VAT part, https://www.gov.uk/charge-reclaim-record-vat, read 23 September 2026: the current standard rate of 20 per cent and the warning that rates apply from the date they change, used to check the rate applied against each sale in step 3.
- HM Revenue and Customs, "VAT payments on account", https://www.gov.uk/guidance/vat-payments-on-account, the page shows it was last updated 23 April 2026, read 23 September 2026: the £2.3 million threshold, the instalment calculation and the due dates in step 9.
- HM Revenue and Customs, "Annual accounting Scheme (VAT Notice 732)", https://www.gov.uk/guidance/vat-annual-accounting-notice-732, the page shows it was last updated 22 November 2024, read 23 September 2026: the £1,350,000 joining threshold, the £1,600,000 exit threshold and the one-return-a-year structure in step 9.

# vat-return-prep

## You are given
The VAT period's start date and end date exactly as they appear on the registration record. The liability register from vat-on-food, or an equivalent settled list, naming every sale line as zero rated or standard rated with its statutory hook, restricted to the lines that fall within this period. The sales ledger and the purchase ledger for the same period. For every purchase claimed as a VAT reclaim, the supplier invoice reference, its date, and whether it shows a VAT registration number and a VAT amount. The tax point decision Claude has already worked for every deposit, advance booking or invoice dated within fourteen days of the period boundary, naming which of paragraphs 14.2.1, 14.2.2, 14.3 or 14.4 of VAT Notice 700 applied and moving the sale into the correct period where the decision requires it. The figures and sources Claude has already fixed for boxes 1, 2, 4, 6, 7, 8 and 9, each marked either with a source document or with the explicit words "not applicable" and a stated reason. The prior period's filed return, where one exists, supplied for comparison only. The standard rate of VAT and the tax year it belongs to, as read by Claude on the day of use. The Payments on Account and Annual Accounting Scheme thresholds, and whether the business's own annual VAT liability and taxable turnover have been checked against each. All judgement calls, including every liability decision, every tax point decision, and which box each figure belongs in, have already been made and are supplied to you.

## Produce
Write into a `./vat-return-prep-output/` folder:

1. `box-by-box-return.csv` with these columns in this order: `box_number`, `box_description_verbatim`, `figure_gbp`, `derivation_method`, `source_document`, `source_document_date`, `notes`. `box_number` is `1` through `9`. `box_description_verbatim` is copied exactly from the HMRC wording Claude supplied for that box. `derivation_method` is exactly one of `summed from liability register`, `summed from purchase ledger`, `calculated from box 1 plus box 2`, `calculated from box 3 minus box 4`, `not applicable, no source movement in this period`. `figure_gbp` for a `not applicable` box is `0.00`. One row per box, nine rows in total.
2. `reconciliation-register.csv` with columns: `box_number`, `ledger_type`, `ledger_line_ref`, `line_description_verbatim`, `amount_gbp`, `running_total_gbp`, `matches_box_total`. `ledger_type` is exactly one of `sales ledger`, `purchase ledger`, `liability register`, `prior period return`. `matches_box_total` is `yes` or `no`, set for the final row of each box only; every other row of that box leaves the cell empty. One row per ledger line feeding each box, in the order the lines were supplied.
3. `tax-point-register.csv` with columns: `transaction_ref`, `description_verbatim`, `basic_tax_point_date`, `invoice_date`, `payment_date`, `rule_applied`, `actual_tax_point_date`, `period_allocated_to`. `rule_applied` is exactly one of `14.2.1 goods`, `14.2.2 services`, `14.3 invoice or payment before basic tax point`, `14.4 invoice more than 14 days after basic tax point`. One row per transaction Claude supplied a tax point decision for.
4. `deadline-and-scheme-check.md` recording, on separate lines and nothing else: the period start date and end date; the filing and payment deadline calculated as one calendar month and seven days after the period end date; the business's annual VAT liability figure as supplied and whether it exceeds £2.3 million; the business's taxable turnover figure as supplied and whether it exceeds £1,350,000 or £1,600,000; and a stated conclusion for each threshold as `below threshold`, `at or above threshold, review needed` or `no figure supplied, cannot check`.
5. `gaps.md` a numbered list of: every box with a `figure_gbp` and no `source_document`; every Box 4 amount with no matching supplier invoice reference; every ledger line in the sales or purchase ledger for the period with no matching row in `reconciliation-register.csv`; every transaction within fourteen days of the period boundary with no row in `tax-point-register.csv`; any box among 2, 8 or 9 left without a figure or a stated "not applicable" reason; any arithmetic check in `box-by-box-return.csv` that does not tie; and any figure or threshold supplied without a date attached to it.

## Rules
- Codex tabulates, sums and cross checks only. It never decides a tax point, never re-derives a liability, never rounds or estimates a missing invoice amount, and never assumes a Box 2, 8 or 9 figure is nil without an explicit "not applicable" statement supplied to it.
- A box with no supplied source document gets an empty `source_document` cell and a line in `gaps.md`. It is never inferred from a bank total, a card statement or a delivery platform report.
- Box 3 is always calculated as Box 1 plus Box 2, and Box 5 is always calculated as Box 3 minus Box 4, never entered as a supplied figure, and any mismatch against a supplied comparison figure is recorded in `gaps.md` rather than silently corrected.
- Never write a typical VAT recovery rate, an effective tax rate, a typical Box 5 figure as a proportion of turnover, or any other benchmark into any file. No such figure exists for a single independent UK hospitality business and none is to be recorded.
- Never carry a box figure, a tax point decision or a threshold conclusion forward from the prior period's return. The prior period's figures may be recorded in a separate column for comparison and never used in a calculation for the current period.
- Use British English, GBP written as `GBP` or the pound sign, and DD Month YYYY dates. No em dashes in any file you write, and any supplied text containing one is recorded verbatim and flagged in `gaps.md`.
- Every quoted box description, ledger line description and transaction description is copied exactly, including its punctuation and capitalisation.
- Every file ends with this line: this is a working document prepared for the owner's own accountant or bookkeeper to check before the return is filed through Making Tax Digital compatible software. It applies supplied decisions to the supplied figures and is not a ruling that the return shown is correct or that it has been filed.

## Return
The absolute path of every file written, the row count of each CSV, the figure recorded in each of the nine boxes with Box 5 stated as the net amount to pay or reclaim, the count of Box 4 amounts with no matching supplier invoice, the count of ledger lines with no matching reconciliation row, the count of transactions with no tax point register row, the conclusion recorded in `deadline-and-scheme-check.md` for the filing deadline and for each of the two scheme thresholds, and the `gaps.md` item count.