Your VAT return and your VAT payment share one deadline: one calendar month and 7 days after the end of your accounting period. Miss the return and you collect a penalty point. Miss the payment and you enter a completely separate penalty regime that starts charging at day 16.
The two systems run in parallel and are assessed independently. Filing on time does nothing for a late payment, and paying on time does nothing for a late return.
The deadline
For a quarterly filer, one calendar month and 7 days works out like this.
| Quarter ends | Return and payment deadline |
|---|---|
| 31 January | 7 March |
| 28 or 29 February | 7 April |
| 31 March | 7 May |
| 30 April | 7 June |
| 31 May | 7 July |
| 30 June | 7 August |
| 31 July | 7 September |
| 31 August | 7 October |
| 30 September | 7 November |
| 31 October | 7 December |
| 30 November | 7 January |
| 31 December | 7 February |
Weekends and bank holidays do not move the date. Your return must be submitted and your payment must reach HMRC on or before the deadline even if it falls on a Saturday, Sunday or bank holiday. Allow time for the payment to clear — HMRC’s account, not your bank’s outbox, is what counts.
A nil return is still a return. If you are VAT registered you must submit even when there is nothing to pay and nothing to reclaim, and a late nil return earns a point exactly like any other.
Annual Accounting Scheme users file one return a year and make advance payments through the year, so the pattern above does not apply — your due dates come from HMRC when you join.
The penalty points system
Late submission penalties have worked on points since VAT accounting periods starting on or after 1 January 2023. The old default surcharge no longer applies to current periods.
One late return, one point. You accumulate points until you reach the threshold for your filing frequency. At the threshold you get a £200 penalty — and a further £200 for every subsequent late submission while you remain at the threshold.
| Filing frequency | Penalty point threshold |
|---|---|
| Annually | 2 |
| Quarterly | 4 |
| Monthly | 5 |
Non-standard accounting periods agreed with HMRC follow the equivalent rules: a period over 20 weeks uses the annual threshold of 2, a period over 8 weeks and no more than 20 weeks uses the quarterly threshold of 4, and a period of 8 weeks or less uses the monthly threshold of 5.
Worked example. A company files quarterly, so its threshold is 4. It already has 3 points from three previous late returns. The next return is late, giving it a fourth point — it hits the threshold and receives a £200 penalty. The return after that is filed on time: it stays at 4 points but pays nothing. The following return is late again: still at the threshold, so another £200.
The threshold is a ceiling, not a reset. You do not start collecting fresh points above it. You simply pay £200 every time you file late until you clear the points.
Which returns do not attract points
The late submission rules do not apply to:
- your first VAT return after registering
- your final VAT return after cancelling your registration
- one-off returns covering a period other than a month, quarter or year — for example a four-month return created when you switch from quarterly to annual filing
When points expire
Below the threshold, points expire automatically. The timing depends on the return’s due date:
- if the deadline was not the last day of a month, the point expires on the last day of the month 24 months later
- if the deadline was the last day of a month, the point expires on the last day of the month 25 months later
Since most quarterly deadlines fall on the 7th, the 24-month rule is the one that usually applies.
At the threshold, nothing expires on its own. You must meet two conditions to clear all your points.
Condition A — complete a period of compliance, submitting every return on time.
| Filing frequency | Period of compliance | Returns to file on time |
|---|---|---|
| Annual | 24 months | 2 |
| Quarterly | 12 months | 4 |
| Monthly | 6 months | 6 |
The earliest the period can start is the first day of the month after the month containing your last missed deadline. A missed 7 July deadline means the earliest start is 1 August; a missed 31 March deadline means the earliest start is 1 May.
Condition B — submit all outstanding returns for the previous 24 months. That 24-month window includes the period of compliance itself. Catching up on old returns is not optional here; you can file on time for a full year and still be stuck at the threshold with an unfiled return from 18 months ago.
Points reset to zero on the first day both conditions are met.
Late payment penalties
A separate regime applies to VAT paid late, and it is time-sensitive rather than points-based.
| How overdue | First late payment penalty | Second late payment penalty |
|---|---|---|
| Up to 15 days | None | None |
| 16 to 30 days | 3% of the VAT outstanding at day 15 | None |
| 31 days or more | 3% of what was outstanding at day 15 plus 3% of what is still outstanding at day 30 | A daily charge at an annual rate of 10% on the outstanding balance, from day 31 |
Worked example. A business owes £15,000 and pays 51 days late. The first penalty is £900 — 3% of £15,000 at day 15 plus 3% of £15,000 at day 30. The second penalty runs at 10% a year on £15,000 from day 31 to day 51, which is 21 days: £15,000 × 10% × 21 ÷ 365 = £86.30. Total penalties £986.30, before interest.
Time to Pay stops the clock. Asking HMRC for a payment plan between days 1 and 15 avoids the first penalty; asking on or before day 30 avoids the increase at day 31. If you break the arrangement, HMRC charges both penalties as though it had never existed.
Two payments are outside the regime entirely — VAT payments on account, and instalments under the Annual Accounting Scheme.
Interest from day one
Late payment interest runs from the first day the payment is overdue until it is paid in full — it does not wait for day 15 like the penalties do. It is charged at the Bank of England base rate plus 4%, which with the base rate at 3.75% gives a current rate of 7.75%.
Interest is charged on unpaid penalties too, not just unpaid VAT.
Frequently asked questions
When is my VAT return due?
One calendar month and 7 days after the end of your accounting period. A quarter ending 31 March is due by 7 May. The same date applies to your payment, and it does not move for weekends or bank holidays.
How many penalty points before I get a fine?
It depends on how often you file. The threshold is 2 points for annual filers, 4 for quarterly filers and 5 for monthly filers. When you reach it you get a £200 penalty, and another £200 for each subsequent late submission while you remain at the threshold.
Do VAT penalty points expire?
Below the threshold, yes — automatically, 24 months after the month containing the missed deadline, or 25 months if the deadline was the last day of a month. At the threshold they do not expire on their own. You must file on time for a full period of compliance and submit every outstanding return for the previous 24 months.
Do I get a penalty point for a nil VAT return?
Yes. If you are VAT registered you must submit a return even with no VAT to pay or reclaim, and a late nil or repayment return earns a point in the same way as any other.
What is the penalty for paying VAT late?
Nothing for the first 15 days. From day 16 to day 30 it is 3% of the VAT outstanding at day 15. From day 31 the first penalty rises to 3% at day 15 plus 3% at day 30, and a second penalty accrues daily at an annual rate of 10% on the outstanding balance. Interest at 7.75% runs from day one regardless.
Not missing the date
Both regimes are automatic, and both are cheap to avoid and expensive to fix. The businesses that end up at the points threshold rarely intended to file late — they were waiting on a supplier invoice, or the bookkeeping ran a fortnight behind, and 7 May arrived anyway.
SmartFiling files MTD VAT returns on a fixed fee, working directly in Xero, QuickBooks or FreeAgent, with every return reviewed and signed off by an ICAEW Chartered Accountant before submission.
