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Businesses must ensure that they submit VAT returns and make payments on time; otherwise they may be subject to penalties.
The deadline for submitting your VAT return is usually one calendar month and seven days after the end of the accounting period. This includes the time for your payment to reach HMRC so enough time needs to be allowed. If you are using the Annual Accounting Scheme however, the due date will be different.
Use our VAT Calculator to work out how much VAT you’ll pay.
If you’re unsure of your VAT return deadline you can log into your online account, and tick to receive reminders of your VAT due date. It will also tell you when the payment is received by HMRC. Every VAT registered business must keep a VAT account, and this will help in the completion of your VAT return.
Below is a reproduction of an example of a VAT account.
Period from: 1 January to 31 March – This is the VAT period to which your 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 | ||
| Net over claim of input tax from previous returns | -125.50 | Net understatement of output tax on previous returns | 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 | |
| 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 2018. | 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 2018. |
| 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 | The due date for the submission of your VAT return and to make any payment due is one month and seven days after the end of the VAT period. In this example, the return must be submitted and payment made by 7 May. |
If you file your VAT return late or your payment is late then HMRC will record that you are in default.
You may need to pay a surcharge in addition to the VAT which is payable, the amount will depend on the number of times you have defaulted in a twelve month period. However, there will be no surcharge for the first time you default.
The surcharges are a percentage of the unpaid VAT:
| Annual Turnover | Less than £150,000 | £150,000 or more |
|---|---|---|
| Second default within 12 months | None | 2%* |
| Third default within 12 months | 2%* | 5%* |
| Fourth default within 12 months | 5% | The higher of 10% or £30 |
| Fifth default within 12 months | The higher of 10% or £30 | The higher of 15% or £30 |
| Sixth or more default within 12 months | The higher of 15% or £30 | The higher of 15% or £30 |
* no surcharge if this is less than £400
Also note that interest may be due to HMRC on underpaid VAT.
All payments now need to be made electronically. The primary method is through direct debit, which you can do once you have registered to file your returns through your online account. You must make sure you’ve registered for this method well in advanced of your due date to ensure that it has been set up in time. To explore payment methods, visit the GOV.UK website.
Other types of electronic payments must be sent one calendar month and seven days after the end of your account period.
Although it depends on your method, you will need to submit payment by the 5th of the month, to ensure it reaches HMRC by the 7th.
Net errors made in previous VAT periods can be corrected on later VAT returns if they are either:
A net error is the difference between the total errors in output VAT and the total errors in input VAT.
Failure to disclose an error could result in a misdeclaration penalty of 15% of the unpaid VAT.
To notify HMRC of errors, the form VAT652 is used. If you are unsure about whether you are required to disclose errors to HMRC or are unsure about the penalties or interest you may be charged on these errors, you should speak to an accountant.
There is no surcharge if you submit a late VAT return if you:
There is no misdeclaration penalty if you have voluntarily disclosed an error.
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