Definition
A VAT return is the report a VAT-registered business sends to HMRC, usually every three months, showing how much VAT it charged on sales (output VAT) and how much it paid on business purchases (input VAT). The difference is the amount to pay HMRC or reclaim. Under Making Tax Digital, every VAT return must be sent through compatible software.
Deadlines
Returns and payment are normally due one calendar month and seven days after the end of the VAT period. For a quarter ending 30 June 2026, both are due by 7 August 2026. A return is needed even when there is no VAT to pay or reclaim.
Late returns and payments
Each late return earns one penalty point. Quarterly filers reach the threshold at 4 points, which brings a £200 penalty, and each further late return costs another £200. Late payment penalties start once VAT is more than 15 days overdue, and interest runs at the Bank of England base rate plus 4%. The detail is in VAT return deadlines and penalty points.
Filing under MTD
Records must be kept as digital records in software, or in spreadsheets connected by bridging software. The steps are in how to submit a VAT return under MTD, and SmartFiling’s MTD VAT return service prepares and submits returns.
Related questions
- How do I register for VAT? Online with HMRC, within 30 days of the end of the month in which taxable turnover went over £90,000.
- How much does an accountant charge for VAT returns? Fees depend on transaction volumes and bookkeeping; see what a VAT return accountant costs.
Related terms
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VAT registration threshold
The VAT registration threshold is the level of VAT-taxable turnover at which a UK business must register for VAT with HMRC. It is £90,000.
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Input and output VAT
Output VAT (output tax) is the VAT a VAT-registered business charges on its sales. Input VAT (input tax) is the VAT it pays on goods and services bought for the business.
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VAT penalty points
VAT penalty points are HMRC's points-based system for late VAT returns, used for accounting periods starting on or after 1 January 2023.
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Digital records
Digital records are the business records that Making Tax Digital (MTD) requires to be kept in software rather than on paper.
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