# Introduction - Tax Filing

A filing period collects the tax you charged customers and the tax you were charged by vendors, then nets them into one figure you either owe or reclaim.

**Video coming soon:** Building a VAT return from your books, box by box.

SorviAI Finance assembles the numbers, and for UK VAT it can submit them for you: the product connects to HMRC under Making Tax Digital, so a finalised return can go straight from here.

![The VAT Filing screen showing a draft quarterly return for 01/07/2026 to 30/09/2026, with the VAT registration number in the header and tabs for Unsubmitted Return and All Returns. A summary strip gives a due date of 06/11/2026, VAT Payable of 4,488.59 and an accounting basis of Accrual. Return Details lists boxes 1 to 8, from VAT due on sales through to dispatches to EU member states, with an Adjust link on boxes 1 and 4.](https://www.sorviai.com/help/tax-filing/vat-return.png)

*Every box is calculated from your books. Adjust appears only where the return allows a manual figure.*

## How the figures are gathered

Every posted transaction carries its tax on each line. A filing period is simply a date range: SorviAI Finance sums the tax on everything posted within it, splits that by rate and by direction, and nets the two sides.

1. **Output tax**: Charged on your sales
2. **Input tax**: Charged to you on purchases
3. **Net position**: Payable, or reclaimable

> **Warning:**
>
> **Drafts are invisible to tax**
>
> A draft invoice or an unapproved bill has posted nothing, so its tax is not in your return. This is the most common cause of a return that looks too low, and it is worth checking first every single time.

## Accrual and cash bases

| Basis | Tax counted when | Suits |
| --- | --- | --- |
| Accrual | The invoice or bill is posted | Most businesses. It is the default in most jurisdictions. |
| Cash | The payment is received or made | Smaller businesses where permitted, and where customers pay late. |

The basis must match what you registered for with your tax authority. Changing it mid-year makes periods incomparable and is not something to do because a number looked nicer.

## Filing to HMRC

For UK VAT the product talks to HMRC directly. You authorise the connection once, and from then on it can read your filing obligations, submit a finalised return, and read back what HMRC says you owe and what it has received.

1. **Authorise**: One-off connection to HMRC
2. **Finalise**: Locks the return locally
3. **Submit**: Sent under Making Tax Digital
4. **Accepted**: HMRC confirms, or rejects

A return moves through Draft, Finalised, Submitted, and then Accepted or Rejected by HMRC. Only the first two are yours to undo.

## What SorviAI Finance does not do

- It submits **UK VAT only**. HMRC Making Tax Digital is the one filing integration; every other jurisdiction is assemble-here, file-there.
- It does **not** know your jurisdiction's rules. It sums what you told it, at the rates you set.
- It does **not** stop you filing a period with drafts still in it.
- It does **not** lock a period automatically once a return is filed. Locking is a separate, deliberate step.