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A VAT Return is a form you fill in to tell HM Revenue and Customs (HMRC) how much VAT you鈥檝e charged and how much you鈥檝e paid to other businesses.

You usually need to send a VAT Return to HMRC every 3 months. This is known as your 鈥榓ccounting period鈥�.

If you鈥檙e registered for VAT, you must submit a VAT Return even if you have no VAT to pay or reclaim.

Deadlines

The deadline for submitting your return online is usually one calendar month and 7 days after the end of an accounting period. This is also the deadline for paying HMRC. You need to allow time for the payment to reach HMRC鈥檚 account.

Use your VAT online account to:

• find out when your VAT Returns are due
• find out when the payment must clear HMRC鈥檚 account
• check and appeal penalties
• check that HMRC has received your VAT return

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.

You鈥檒l 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鈥檙e owed from HM Revenue and Customs (HMRC) (if you鈥檙e 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
• have not charged any VAT to the customer - whatever price you charge is treated as including VAT

Read the guidance on completing your VAT Return.

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

Accounting for import VAT

You can account for import VAT on your VAT Return by using 鈥榩辞蝉迟辫辞苍别诲 VAT 补肠肠辞耻苍迟颈苍驳鈥�. This allows you to declare import VAT and reclaim it as a business expense on the same VAT Return.

Using estimated figures

Ask HMRC for permission to use estimated figures. You鈥檒l need a good reason why you cannot give accurate figures on your VAT Return.

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

Claiming relief on bad debts

If a customer does not pay you for goods or services, you can write off the invoice as a 鈥榖ad debt鈥�. If you鈥檙e in this situation, you might be able to claim relief from VAT.

To qualify for the relief:

• the debt must be older than 6 months
• you must submit your claim within 4 years and 6 months of the date the payment was due or the date of supply (whichever was later)
• you must not have sold the debt on
• you must not have charged more than the normal price for the item

You need to keep records about the debt. Submit your claim for a refund in your VAT Return.

You must submit your VAT Return using accounting software that鈥檚 compatible with Making Tax Digital.

Check which accounting software you can use to submit your VAT return.

There are different ways to send your VAT Return if:

• you鈥檝e cancelled your VAT registration
• you鈥檙e exempt from Making Tax Digital for VAT
• your business is subject to an insolvency procedure

If you鈥檝e cancelled your VAT registration

You cannot send VAT Returns using Making Tax Digital software if you are no longer VAT registered. You鈥檒l need to send any returns using your VAT online account.

If you鈥檙e exempt from Making Tax Digital for VAT

You can only send your return by post or through your VAT online account if you have an exemption from Making Tax Digital for VAT.

For example if you:

• object to using computers on religious grounds
• do not have access to the internet

Find out how to send VAT Returns if you鈥檙e exempt.

If your business is subject to an insolvency procedure

You must send a paper VAT Return unless you have either:

• a Company Voluntary Arrangement
• an Individual Voluntary Arrangement

If you have either arrangement, you can choose to send a paper return or complete the return using your VAT online account.

After you鈥檝e sent your VAT 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.

You can correct errors in returns for the preceding 4 years, as long as the net value of the errors is either:

• 拢10,000 or less
• between 拢10,000 and 拢50,000 but less than 1% of the total value of your sales

For these kinds of errors, make an adjustment or correction in your next return.

You must tell HM Revenue and Customs (HMRC) separately about net errors that are:

• over 拢50,000
• over 拢10,000 if they exceed 1% of the total value of sales
• deliberate errors

Check how to tell HMRC about errors in your VAT return.

Calculate the net value of errors

To work out the net value of the errors:

• add up the additional tax due to HMRC
• subtract the tax you鈥檙e due

How to make the adjustment in your next VAT return

When you submit your next return, add the net value to box 1 for tax due to HMRC, or to box 4 for tax due to you.

You must:

• keep details about the error (for example, the date it was discovered, how it happened and the amount of VAT involved)
• include the value of the error in your VAT account

Read more about how to correct VAT errors and make adjustments or claims.

Contact the VAT General Enquiries Team if you need help making corrections.

If you miss the deadline for submitting your return, HMRC will send you a 鈥�VAT notice of assessment of tax鈥� 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.

The amount you owe will be worked out differently, depending on which accounting period it鈥檚 for.

You should contact HM Revenue and Customs (HMRC) as soon as possible if you鈥檙e having difficulty paying by the deadline.

If your accounting period started on or after 1 January 2023

You鈥檒l get separate penalties for submitting your return late and paying late.

If you submit your return late

For each VAT Return you send late, you鈥檒l get a penalty point. This includes nil returns (where you have nothing to declare).

Once you reach your penalty point threshold, you鈥檒l get a 拢200 penalty. The threshold is set by your accounting period (if you pay monthly, quarterly or annually).

You鈥檒l get a further 拢200 penalty for each subsequent late submission while you鈥檙e at the threshold.

You can see how many points you have in your VAT online account.

If you make a late payment

You could get a penalty if you pay late:

• on your VAT Return
• following an amendment to a return or correction
• from a VAT assessment HMRC issued when you did not submit your return
• from a VAT assessment HMRC issued for another reason

How much you鈥檒l be charged depends on how late you pay.

The penalty amount goes up after 16 days, and then again after 31 days.

You鈥檒l be charged late payment interest from the first day your payment is overdue, until you pay in full. This also applies if you鈥檙e paying in instalments.

If your accounting period started on or before 31 December 2022

HMRC will record a 鈥榙efault鈥� on your account if you鈥檙e late with your VAT Return or payment.

Getting a default may put you in a 鈥榮urcharge period鈥� of 12 months. If you get another default during the 12-month period, you may have to pay an extra amount (a 鈥榮urcharge鈥�) on top of the VAT you owe.

You do not pay a surcharge the first time you default.

Entering a surcharge period

You will enter a 12-month surcharge period if you鈥檙e late submitting your payment, and your turnover is 拢150,000 or more.

If your turnover is under 拢150,000, you will enter a 12-month surcharge period if you鈥檙e late submitting your payment twice in 12 months.

If you鈥檙e late submitting your return or payment in a surcharge period

Your 12-month surcharge period will restart if you鈥檙e late submitting your return.

If you鈥檙e late submitting your payment, your 12-month surcharge period will restart and you might need to pay a surcharge.

How much you pay

The surcharge is a percentage of the outstanding VAT for the period in default. It鈥檚 calculated on the due date.

This table shows how much you鈥檒l be charged if you default within a surcharge period. HMRC will write to you explaining any surcharges you owe.

Defaults within 12 months	Surcharge if annual turnover is less than 拢150,000	Surcharge if annual turnover is 拢150,000 or more
2nd	No surcharge	2% (no surcharge if this is less than 拢400)
3rd	2% (no surcharge if this is less than 拢400)	5% (no surcharge if this is less than 拢400)
4th	5% (no surcharge if this is less than 拢400)	10% or 拢30 (whichever is more)
5th	10% or 拢30 (whichever is more)	15% or 拢30 (whichever is more)
6 or more	15% or 拢30 (whichever is more)	15% or 拢30 (whichever is more)

There鈥檚 no penalty for a late nil return (where you have nothing to declare).

If your VAT notice of assessment of tax is wrong

If the assessment is too high, send a correct VAT Return and VAT payment.

If the assessment is too low you need to either:

• tell HMRC within 30 days
• send a correct VAT Return and VAT payment

Otherwise, you might be charged a penalty (up to 30% of the assessment).

How to pay a surcharge or penalty

There are several ways you can pay your VAT bill, including any surcharges and penalties.

HM Revenue and Customs (HMRC) will charge you interest if you do not pay the right amount of VAT by the deadline. If HMRC owes you a repayment of VAT, you may be entitled to interest.

There are different interest rates for tax that was underpaid or overpaid before 25 February 2025.

If your accounting period started on or after 1 January 2023

If you pay too little VAT

HMRC will charge you late payment interest from the first day your payment is overdue until you pay in full.听

This includes amounts overdue after:

• a VAT Return
• an amendment or correction of a return
• a VAT assessment made by HMRC听
• a missed VAT payment on account

Read more about late payment interest if you do not pay VAT or penalties on time.

If you pay too much VAT

You may be entitled to repayment interest on any VAT that you are owed.

You do not need to submit a claim for repayment interest. If HMRC finds that you are entitled to repayment interest, you will receive it automatically.听

Read more about repayment interest on VAT credits or overpayments.

If your accounting period started on or before 31 December 2022

If you pay too little VAT

You may be charged 7.00% interest if you:

• report less VAT than you charge, or reclaim more than you pay
• pay an assessment that HMRC later finds was too low
• you owe HMRC VAT because of a mistake on your VAT Return

Use your to check the amount you owe.

HMRC will also send you a notice telling you how much you owe and how it鈥檚 worked out.

If you do not pay within 30 days, further interest is charged on the VAT due from the date of the notice. You鈥檒l be charged interest for as long as you do not pay, up to a maximum of 2 years.

You cannot deduct the interest HMRC charges you when working out your taxable profits.

If you pay too much VAT

You may be able to claim 3.50% interest if HMRC鈥檚 mistake means:

• you pay too much VAT
• you reclaim too little VAT
• a payment to you from HMRC was delayed

Interest is usually paid for the whole period from when the VAT was overpaid or reclaimed until the date repayment is authorised.

If you caused a delay to any payments (for example by not claiming straight away) HMRC might leave this time out.

You need to claim the interest separately from the repayment itself.

Write to HMRC with details of the repayment, explaining why you鈥檙e owed interest. You must do this within 4 years of the date HMRC authorised the original repayment. Use the postal address on the letter you received from HMRC about your VAT.

Any interest you get from HMRC counts as taxable income.

Paying interest to your customers

You must pay your customers any associated interest if you have reimbursement agreements with them to refund them any VAT.

Contact the person at HMRC who dealt with your claim if you need to find out how the interest was calculated. This can help you work out how much you need to repay each customer.

You must give the money back to HMRC within 14 days if you cannot get in touch with a customer to repay them.

Challenging an HMRC decision

You cannot appeal the decision to charge you interest but you can challenge the amount of interest charged.