UK VAT returns: deadlines and Making Tax Digital

What a VAT Return is

A VAT Return is a form you send to HMRC. It tells HMRC how much VAT you have charged and how much you have paid to other businesses. You usually send one every 3 months. This is your accounting period.

If you are registered for VAT, you must send a return even if you have no VAT to pay or reclaim. GOV.UK says it includes:

• your total sales and purchases
• the amount of VAT you owe
• the amount of VAT you can reclaim
• the amount of VAT HMRC owes you, if you are reclaiming VAT on business expenses

You must include VAT on the full value of what you sell. That includes goods or services you take instead of money, for example in part-exchange. If you have not charged the customer any VAT, whatever price you charge is treated as including VAT. HMRC can charge a penalty of up to 100% of any tax understated or over-claimed if you send an inaccurate return.

The deadline

The deadline for sending your return online is usually one calendar month and 7 days after the end of the accounting period. The same date is the deadline for paying. Your return has to be sent, and your payment has to reach HMRC's account, on or before that date, even if it falls on a weekend or a bank holiday. Your VAT online account shows when each return is due and when the payment must clear.

Worked example. For a quarter from 1 July 2026 to 30 September 2026, one calendar month after the end of the quarter takes you to 31 October 2026. Adding 7 days gives a deadline of Saturday 7 November 2026. This matches HMRC's own examples, such as a quarter ending 31 March 2025 being due on 7 May 2025.

If your quarters end in March, June, September and December, the deadlines for quarters ending in 2026 work out like this. Your own period dates may differ, so check them in your VAT online account.

The Annual Accounting Scheme has different deadlines, covered below.

Making Tax Digital for VAT

Making Tax Digital for VAT requires all VAT-registered businesses to keep records digitally and file their VAT Returns using software. GOV.UK says all VAT-registered businesses should now be signed up, and you no longer need to sign up yourself.

The software must be able to keep the records the rules require, prepare your return from those records and send it to HMRC through HMRC's API. You can use one compatible package, or bridging software that connects other software, such as a spreadsheet, to HMRC. GOV.UK has a service to search for compatible software. When you connect it, you grant it authority to access your HMRC data. That authority lasts 18 months, and you can check or withdraw it at any time.

The records you must keep digitally include:

• your business name, the address of your principal place of business, your VAT registration number and any VAT accounting schemes you use
• for each sale: the time of supply (tax point), the value excluding VAT and the VAT rate charged
• for each purchase: the time of supply, the value and the input VAT you will claim
• any adjustments you make to a return

You still keep other records, such as invoices, but they do not have to be digital. If your records are spread across more than one program, the programs must be joined by digital links. Linked spreadsheet cells, file import and export, and API transfers count. HMRC does not count copying and pasting, or typing figures across by hand.

Exemptions

You do not need to follow the Making Tax Digital rules if HMRC is satisfied that:

• it is not practical for you to use digital tools for your records or returns, for example because of age, disability or location. HMRC says you might not be exempt purely because of your age.
• you or your business are subject to an insolvency procedure
• your business is run entirely by practising members of a religious society whose beliefs are incompatible with electronic communications or records
• you are already exempt from filing VAT returns online

You ask HMRC for an exemption through VAT general enquiries, and HMRC gives its decision in writing. Apart from a few cases, such as a return after you cancel your registration, only an exempt business can send its return by post or through the VAT online account. HMRC can charge a penalty of up to £400 if you send a paper return and you are not exempt.

Paying

Allow time for the money to reach HMRC. GOV.UK gives these times:

• Direct Debit. Set it up in your VAT online account at least 3 working days before you submit your return. HMRC then collects the payment 3 working days after the payment deadline. If you file late, the payment is taken 3 days after you file.
• Faster Payments usually reach HMRC the same or next day, including weekends and bank holidays. CHAPS usually arrives the same working day, within your bank's processing times. Bacs usually takes 3 working days.
• Debit or corporate credit card. HMRC accepts the payment on the date you make it, even at weekends and on bank holidays. You cannot pay with a personal credit card, and corporate cards carry a non-refundable fee.

Use your 9-digit VAT registration number, with no spaces, as the payment reference.

Late returns: penalty points

For accounting periods starting on or after 1 January 2023, late returns and late payments have separate penalties. Each return you send late earns a penalty point, including nil returns. When you reach the threshold for your accounting period, you get a £200 penalty, and a further £200 penalty for each late return while you stay at the threshold.

Below the threshold, each point expires on its own. If the return was due on the last day of a month, the point expires on the last day of the month 25 months later. Otherwise it expires on the last day of the month 24 months later.

At the threshold, points only go when you meet two conditions. First, send every return on time for a period of compliance: 12 months (4 returns) if you file quarterly, 24 months if annually, or 6 months if monthly. Second, send every outstanding return for the previous 24 months.

The points system does not apply to your first return after you register, your final return after you cancel your registration, or a one-off return for a period other than a month, quarter or year.

Late payments: penalties and interest

Late payment penalties depend on how late you pay:

• Up to 15 days overdue: no penalty.
• 16 to 30 days overdue: a first penalty of 3% of the VAT still owed at day 15.
• 31 days or more: the first penalty becomes 3% of what was owed at day 15 plus 3% of what was still owed at day 30. A second penalty is charged every day from day 31, at a yearly rate of 10% on the balance, until you pay in full. If the tax is still unpaid, HMRC assesses this penalty just before its 2-year time limit runs out.

HMRC's own example: a company owes £15,000 and pays it on day 51. The first penalty is £450.00 at day 15 plus £450.00 at day 30, which is £900.00. The second penalty runs for 21 days, from day 31 to day 51: £15,000 × 10% × 21 ÷ 365 = £86.30. In total the company pays £986.30 in penalties.

If you cannot pay on time, contact HMRC as soon as you can. A Time to Pay arrangement, a payment plan agreed with HMRC, can mean lower or no late payment penalties. GOV.UK says that to avoid the penalties that start on day 16, you should pay in full or ask for Time to Pay by day 15.

Late payment interest is charged as well, from the first day the payment is overdue until you pay in full. It is simple interest at the Bank of England base rate plus 4%, so the rate moves with the base rate. HMRC's interest rates table listed 7.75% from 9 January 2026 when this page was checked. Check the table for the current rate. Overdue penalties also attract interest.

Correcting a mistake

You can correct errors in returns from the past 4 years in your next return, as long as the net value of the errors is £10,000 or less, or between £10,000 and £50,000 but less than 1% of your total sales. Add the net value to box 1 if it is tax due to HMRC, or to box 4 if it is tax due to you, and keep a note of the error. Larger errors, and any deliberate error, must be reported to HMRC separately.

How the small business schemes change returns

• Annual Accounting Scheme. You send one VAT Return a year instead of four, and make advance payments towards the bill. If your accounting period is between 4 and 12 months long, the return is due 2 months after the end of the period. Advance payments are 10% of your estimated bill each month, at the end of months 4 to 12, or 25% each quarter, at the end of months 4, 7 and 10. The final balancing payment is due within 2 months of the end of the period. HMRC notes the scheme may not suit you if you usually reclaim VAT, because you get only one refund a year. GOV.UK says late payment penalties do not apply to Annual Accounting Scheme instalments.
• Cash Accounting Scheme. Your return counts VAT on sales when your customers pay you, and VAT on purchases when you pay your suppliers. Under standard accounting you report invoices whether or not they have been paid.
• Flat Rate Scheme. You pay HMRC a fixed rate of VAT and keep the difference between that and the VAT you charge. You cannot reclaim VAT on purchases, except certain capital assets. The Flat Rate Scheme calculator compares it with standard accounting.

Each scheme has its own turnover limits and conditions. The UK VAT calculator page summarises them, and GOV.UK suggests talking to an accountant or tax adviser about whether one suits you.

Checklist

• You know your accounting period dates and each deadline, from your VAT online account.
• Your records are kept in software that is compatible with Making Tax Digital, or you have an exemption from HMRC in writing.
• Records held in more than one program are joined by digital links, not copy and paste.
• Each sale and purchase has its tax point, value and VAT recorded.
• You send a return every period, even when there is no VAT to pay or reclaim.
• Your payment will reach HMRC by the deadline: a Direct Debit is set up at least 3 working days before you submit, or you allow for the payment method's timing.
• Your 9-digit VAT number, with no spaces, is the payment reference.
• If you cannot pay in full, you contact HMRC about Time to Pay by day 15 after the deadline.
• Small errors from earlier returns are corrected in this one, and larger ones reported separately.

Sources

• GOV.UK: Sending a VAT Return, including deadlines, how to send, correcting errors, and late returns and payment (updated 26 November 2024)
• GOV.UK: Pay your VAT bill, including Direct Debit and other payment methods (updated 13 December 2024)
• HMRC: Making Tax Digital for VAT (VAT Notice 700/22), sections 1 to 3 (updated 1 April 2022)
• GOV.UK: Find software that's compatible with Making Tax Digital for VAT (updated 1 May 2025)
• GOV.UK: Charge, reclaim and record VAT, including keeping VAT records (updated 30 October 2024)
• HMRC: Penalty points and penalties if you submit your VAT Return late (updated 1 March 2023)
• HMRC: Remove penalty points you've received after submitting your VAT Return late (updated 15 February 2023)
• HMRC: How late payment penalties work if you pay VAT late (updated 10 July 2025)
• HMRC: Late payment interest if you do not pay VAT or penalties on time (updated 6 February 2026)
• HMRC: Interest rates for late and early payments (updated 23 December 2025)
• GOV.UK: VAT Annual Accounting Scheme, including return and payment deadlines (updated 24 February 2015)
• GOV.UK: VAT Cash Accounting Scheme (updated 8 February 2018)
• GOV.UK: VAT Flat Rate Scheme (updated 11 November 2024)