Submitting Your VAT Return

If you're registered for VAT, you must submit a VAT Return to HMRC every three months using Making Tax Digital software. The deadline is usually one calendar month and seven days after your accounting period ends, and you need to submit a return even if you have no VAT to pay...

Introduction

Using Making Tax Digital Software

You must submit your VAT Return using accounting software that's compatible with Making Tax Digital. This is the standard requirement for all VAT-registered businesses unless you have a specific exemption.

You can check which accounting software is compatible with Making Tax Digital through HMRC's guidance. The software connects directly to HMRC's systems to submit your return.

HMRC can charge you a penalty of up to £400 if you send a paper VAT Return when you're not exempt from Making Tax Digital.

VAT Return Deadlines

You usually need to send a VAT Return every three months. This three-month period is known as your 'accounting period'.

The deadline for submitting your return online is usually one calendar month and seven days after the end of an accounting period. This is also the deadline for paying any VAT you owe. You need to allow time for the payment to reach HMRC's account.

You can use your VAT online account to find out when your VAT Returns are due and when payments must clear HMRC's account.

If you use the VAT annual accounting scheme, you can set up an email reminder each time your VAT Return is due through your VAT online account.

What to Include in Your VAT Return

You'll need to include:

Your total sales and purchases
The amount of VAT you owe
The amount of VAT you can reclaim
The amount of VAT you're owed from HMRC (if you're reclaiming VAT on business expenses)

You must include the VAT on the full value of what you sell, even if you receive goods or services instead of money (for example, if you take something in part-exchange), or you have not charged any VAT to the customer. Whatever price you charge is treated as including VAT.

If you're registered for VAT in Northern Ireland, you must include EU sales on your VAT Return and complete an EC Sales List.

HMRC can charge you a penalty of up to 100% of any tax under-stated or over-claimed if you send an inaccurate return.

If You're Exempt from Making Tax Digital

You're exempt from Making Tax Digital for VAT if:

You applied for an exemption and HMRC sent you a letter confirming you're exempt (for example, if you object to using computers on religious grounds or do not have access to the internet)
You or your business are subject to an insolvency procedure
You're sending your final return after cancelling your VAT registration

If You Applied for an Exemption

Your letter from HMRC will tell you to fill in either a paper return or an online return using your VAT online account.

If Your Business Is Subject to an Insolvency Procedure

You must send a paper return, unless you have either a Company Voluntary Arrangement or an Individual Voluntary Arrangement. If you have either arrangement, you can choose to send a paper return or complete the return online using your VAT online account.

After Cancelling Your VAT Registration

You cannot send a VAT Return using your Making Tax Digital software if you've deregistered for VAT. You'll need to send your return using your VAT online account.

Sending Paper Returns

HMRC will send you paper returns to fill in and send back if you're exempt from Making Tax Digital. If you do not receive one or you lose a VAT return, you should contact the VAT helpline as soon as possible and ask for a replacement.

The paper returns will show you the address you should send the return to and the due date. Your return must reach HMRC by the due date.

Using Your VAT Online Account

You can send your returns by signing into your VAT online account. Your online account will also tell you when your returns are due and when the payment must clear HMRC's account.

You can also use your VAT online account to check that HMRC has received your VAT return and to check and appeal penalties.

Submitting Returns When You Have No VAT to Pay

You must submit a VAT Return even if you have no VAT to pay or reclaim. This is a requirement for all VAT-registered businesses, regardless of whether there's any VAT owed.

Using Estimated Figures

You need to ask HMRC for permission to use estimated figures. You'll need a good reason why you cannot give accurate figures on your VAT Return.

If you're allowed, you will not be charged a penalty unless you miss the deadline or make a careless or deliberate error. You'll normally have to give the correct figures in your next VAT Return.

After You've Submitted Your Return

You must pay your VAT bill by the deadline shown on your VAT Return.

You can use your VAT online account to check if HMRC has received your VAT return.

Late Submissions

If you miss the deadline for submitting your return, HMRC will send you a 'VAT notice of assessment of tax' telling you how much VAT they think you owe.

You may need to pay a surcharge or penalty for submitting your return after the deadline or paying it late. For accounting periods that started on or after 1 January 2023, you'll get separate penalties for submitting your return late and paying late.

You should contact HMRC as soon as possible if you're having difficulty paying by the deadline.

Sources

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.