In short: Most VAT-registered businesses file a VAT return every 3 months. The return and payment are usually due one calendar month and 7 days after the end of the VAT period. Returns must be filed using Making Tax Digital compatible software, and late filing earns penalty points while late payment leads to penalties and interest.
Who needs to file VAT returns?
You must register for VAT if your VAT taxable turnover goes over £90,000 in the previous 12 months, or you expect it to go over £90,000 in the next 30 days alone. You can also register voluntarily below the threshold. Once registered, you must file VAT returns, even if you have no VAT to pay or reclaim.
Different rules apply to businesses based outside the UK that supply goods or services in the UK – they must register whatever their turnover.
How often you file
Most businesses file quarterly, covering three-month VAT periods. HMRC tells you your periods when you register. Some businesses file monthly – for example, if they usually reclaim VAT and want refunds faster. Businesses in the Annual Accounting Scheme file one return a year and make advance payments during the year.
The deadline
For quarterly and monthly returns, the deadline for filing online is usually one calendar month and 7 days after the end of the VAT period. For example, for a period ending 30 June, the return and payment are due by 7 August.
The same deadline applies to payment – the money must reach HMRC by then. Deadlines still apply if they fall on a weekend or bank holiday. You can check your exact deadlines in your HMRC VAT online account.
How to submit: Making Tax Digital
All VAT-registered businesses must follow Making Tax Digital (MTD) for VAT. This means you must:
- keep your VAT records digitally
- submit your VAT returns using MTD-compatible software
Your software sends the return to HMRC directly. Most accounting software packages are compatible. If you use spreadsheets, you can use bridging software to connect them to HMRC. A small number of businesses can apply for an exemption, for example because of age, disability or location.
What goes on a VAT return
Your return shows, for the period:
- the VAT you charged on sales (output tax)
- the VAT you paid on business purchases that you can reclaim (input tax)
- your total sales and purchases, excluding VAT
- the net amount you owe HMRC or that HMRC owes you
Keep invoices and receipts to support every figure.
How to pay
You can pay HMRC by:
- Direct Debit – set it up at least 3 working days before you submit your return. HMRC then collects payment a few working days after the deadline.
- Online or telephone banking (Faster Payments, Bacs or CHAPS)
- Debit or corporate credit card online
- At your bank or building society
Allow time for the payment to clear. Bacs payments can take 3 working days. Use your VAT registration number as the payment reference.
Penalties for late returns
HMRC uses a points-based system for late returns. Each late return gets one penalty point. Once you reach a threshold, you get a £200 penalty, and another £200 for each further late return while you are at the threshold:
- Annual returns: 2 points
- Quarterly returns: 4 points
- Monthly returns: 5 points
Points can be removed after a period of filing on time and clearing any outstanding returns.
Penalties for late payment
Late payment penalties are separate from penalty points. Broadly:
- If you pay within the first 15 days after the due date, there is no penalty.
- From day 16, a first penalty is charged as a percentage of the VAT outstanding.
- From day 31, a second penalty is added, plus a daily penalty on the balance until it is paid.
HMRC also charges late payment interest from the first day the payment is overdue. The exact percentages change, so check the current rates on GOV.UK. If you cannot pay on time, contact HMRC before the deadline – you may be able to agree a Time to Pay arrangement and avoid some penalties.
Practical tips
- Put your VAT deadlines in your calendar as soon as you register.
- Set aside the VAT you collect in a separate bank account.
- Reconcile your books monthly, not just at the end of the quarter.
- Use Direct Debit to avoid missing payments.
- File even when you owe nothing.
How Form My Company can help
Stay on top of VAT without the stress. We can register your company for VAT – it is included in our Fully Inclusive Package – and our Bookkeeping, VAT and Payroll service can prepare and file your VAT returns through MTD-compatible software (price on request). We also prepare your annual accounts, so your VAT and year-end figures match.
Frequently asked questions
When is my VAT return due?
Usually one calendar month and 7 days after the end of your VAT period. For a quarter ending 31 March, the deadline is 7 May.
What is the VAT registration threshold?
You must register if your VAT taxable turnover goes over £90,000 in a rolling 12-month period, or is expected to go over £90,000 in the next 30 days.
Do I need to file a VAT return if I have nothing to pay?
Yes. You must file a return for every period, even if you have no VAT to pay or reclaim.
What is the penalty for a late VAT return?
Each late return earns a penalty point. When you reach the threshold (4 points for quarterly filers), you get a £200 penalty, and £200 for each further late return.
Do I have to use Making Tax Digital for VAT?
Yes. All VAT-registered businesses must keep digital records and submit returns through MTD-compatible software, unless HMRC grants an exemption.