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VAT: All the deadlines and penalties

Businesses must ensure that they submit VAT returns and make payments on time; otherwise they may be subject to penalties.

What is the deadline for filing my VAT Return?

The deadline for submitting your VAT return and paying any VAT due is usually one calendar month and seven days after the end of your VAT accounting period. This applies to most businesses registered for VAT. Any payment must reach HMRC’s bank account by the deadline, so you should allow sufficient time for your chosen payment method to clear. If you use the Annual Accounting Scheme, different deadlines and payment arrangements apply.

Use our VAT Calculator to work out how much VAT you’ll pay.

How can I check the VAT deadlines for my business?

If you’re unsure of your VAT return deadline you can check it by signing into your online account which also allows you to view your VAT obligations, payment history and account balance.

Most VAT-registered businesses must keep digital VAT records and submit VAT Returns using Making Tax Digital (MTD)-compatible software. Maintaining accurate digital records will help you prepare and submit your VAT Returns correctly and on time.

What information do I need to include in my VAT return?

Below is an example of a VAT record that contains the same type of information as MTD software would generate as a digital VAT summary.

Period from: 1 January to 31 March – This is the VAT period to which the example VAT return relates.

VAT deductible – input tax		Comments	VAT payable – output tax		Comments
VAT you have been charged on your purchases	£		VAT you have charged on your sales	£
January	2,215.23	Only include the input VAT that relates to your VAT period. In this example, the VAT period is 1 January to 31 March.		2,780.23	Only include the output VAT that relates to your VAT period. In this example, the VAT period is 1 January to 31 March.
February	1,626.47		February	2,305.81
March	2,792.01		March	3,302.45
	6,633.71			8,388.49
VAT allowable on acquisitions	96.85		VAT due on acquisitions	96.85	The treatment of VAT on acquisitions depends on the type of transaction and where goods are purchased from.
VAT error corrections from previous returns (that resulted in a net over claim of input tax)	-125.50		VAT error corrections from previous returns (that resulted in a net understatement of output tax)	719.26
Bad debt relief	96.48	Only include VAT on bad debts if the debt is over six months old (from the date the payment was due) and is less than four years and six months old.	Annual adjustment:Retail Scheme – Apportionment Scheme 1	91.69	This adjustment only applies to businesses that use the Retail Scheme
Sub total	6701.54		Sub total	9,296.29
Less:			Less:
VAT on credits received from suppliers	-27.50	Only include the input VAT on credit notes that relate to your VAT period. In this example, the VAT period is 1 January 2018 to 31 March.	VAT on credits allowed to customers	-23.00	Only include the output VAT on credit notes that relate to your VAT period. In this example, the VAT period is 1 January 2018 to 31 March.
Total tax deductible	6,674.04		Total tax payable	9,273.29
			Less total tax deductible	6,674.04
			Payable to HMRC	2,599.25	For most businesses, the deadline for submitting a VAT Return and paying any VAT due is one calendar month and seven days after the end of the VAT period. Any payment must reach HMRC by the deadline. In this example, the return must be submitted and payment made by 7 May.

What happens if I file my VAT return late?

If you miss your VAT Return deadline, HMRC will issue a penalty point. Penalty points accumulate each time a return is filed late. Once you reach the penalty threshold for your submission frequency, you’ll receive a £200 penalty. Further late returns may result in additional £200 penalties until you file enough returns on time in order for your points to expire.

The number of penalty points needed before a penalty is charged depends on how often you submit VAT Returns.

Submission frequency	Points threshold
Annual	2 points
Quarterly	4 points
Monthly	5 points

Note that HMRC may issue a penalty point even if you have no VAT to pay or are due a VAT repayment if you submit your return late.

What are my payment methods?

HMRC offers a range of payment methods for VAT, including online or telephone banking, CHAPS, Bacs and debit or corporate credit card payments. Direct Debit is one of the most popular options but if you choose this method, you’ll need to set it up before your payment deadline to allow sufficient time for HMRC to process the instruction.

Whatever payment method you use, you must ensure that your payment reaches HMRC by the deadline shown in your VAT account. Processing times vary depending on the payment method, so it’s important to allow enough time for the payment to clear. For more information about payment methods and processing times, visit the GOV.UK website.

What happens if I pay my VAT late?

If you do not pay the VAT due by the deadline, HMRC may charge a late payment penalty. The amount charged depends on how long the payment remains outstanding. Generally, no penalty is charged if the VAT is paid within 15 days of the due date, although you may still be charged interest.

If the VAT remains unpaid for longer, penalties increase based on the amount outstanding and the length of the delay. You may be able to avoid penalties by agreeing a payment plan with HMRC before the relevant deadline.

Days overdue	Penalty
Up to 15 days	No penalty
16–30 days	3% of VAT outstanding at day 15
31 days or more	3% of VAT outstanding at day15 plus 3% of VAT still outstanding at day 30. An additional daily penalty based on an annual rate of 10% on the outstanding balance. This is charged every day, from day 31 until the outstanding balance is paid in full or when the penalty is assessed after 2 years.

In addition to any penalties, HMRC charges late payment interest on overdue VAT. Interest accrues from the date the payment was due until the outstanding balance is paid in full. The rate of interest is set, and can be changed, by HMRC.

What happens if I file a VAT return that is wrong?

If you discover an error on a previously submitted VAT Return, you may be able to correct it on a later return rather than notifying HMRC separately.

You can usually correct a net VAT error on your next VAT Return if it is:

£10,000 or less; or
Between £10,000 and £50,000, provided the net value of the error is no more than 1% of the value entered in Box 6 of the VAT Return for the period in which the error is discovered.

A net error is the difference between the total errors in output VAT and the total errors in input VAT.

Larger errors, or errors that cannot be corrected on a later return, must be reported separately to HMRC using the VAT error correction process.

If an error results in too little VAT being paid, HMRC may charge a penalty depending on the circumstances. The amount charged will depend on factors such as whether the error was careless or deliberate and may be reduced if you tell HMRC about an error before they discover it as well as fully cooperate in correcting it.

If you are unsure whether an error should be corrected on a future VAT Return or reported separately to HMRC, it is advisable to seek professional advice from an accountant or tax adviser.

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