A London agency stopped noticing its VAT returns

The situation

A growing marketing agency in London was doing what most agencies at that size do: treating VAT as a quarterly emergency and payroll as a monthly one. Both were technically getting done. Both were consuming a director's attention in the last week of every cycle.

The underlying issue was that nothing was reconciled between deadlines. VAT was assembled from the ledger at quarter end rather than coded correctly during it, which meant every return started with a week of working out what the numbers should have been.

Reverse-charge treatment on overseas contractor invoices - a normal feature of an agency with freelance capacity abroad - had been applied inconsistently, which is exactly the kind of error that compounds quietly across quarters.

What we did

Correcting the base

We reviewed the VAT treatment applied across the preceding quarters, identified where reverse charge on overseas supplier invoices had been handled inconsistently, and documented the correct treatment going forward along with the position on what had already been filed.

Moving the work upstream

The fix was not a better quarter-end process - it was coding VAT correctly at the point of entry. Once purchase and sales coding carried the right treatment, the quarterly return became a reconciliation of control accounts rather than a reconstruction.

Publishing the calendar

Twelve months of RTI dates, VAT quarters, P60 and P11D deadlines and the corporation tax dates, issued in advance with a named person responsible for each. The directors stopped tracking deadlines because they no longer needed to.

We were drowning in VAT returns and PAYE filings. Now everything just runs in the background. Best decision we made this year.

Director · Marketing agency · London, UK