VAT return deadline: dates, payment and refunds

What is the deadline for VAT filing?

The VAT return deadline is usually one calendar month and 7 days after the end of an accounting period, and the same date is the deadline for paying HMRC. ^[1] A VAT return is usually sent every 3 months, and that period is known as the accounting period.

Some businesses use business accounting services to keep records and submissions on schedule, while others prepare each return in-house.

The return must be submitted, and the payment must reach HMRC, on or before the deadline, even if it falls on a weekend or bank holiday. A business registered for VAT must still submit a return even if it has no VAT to pay or reclaim. Time also needs to be allowed for the payment to reach HMRC's account.

Annual accounting and other dates that differ

If the business uses the VAT Annual Accounting Scheme, the due date is 2 months after the end of the VAT period. ^[2] There are also different payment deadlines for businesses using the Annual Accounting Scheme or VAT payments on account. Businesses on the annual accounting scheme can set up an email reminder through the VAT online account each time a return is due.

The VAT online account, also known as the business tax account, shows the return and payment deadlines for each period. It can also be used to check that HMRC has received a return.

The guide to the VAT cash accounting scheme covers how that scheme affects the return.

How to make a VAT payment to HMRC

A VAT bill can be paid by Direct Debit, as VAT payments on account, or by another payment method. A Direct Debit is set up in the VAT online account at least 3 working days before the return is submitted; otherwise the payment will not be taken and the first payment has to be made another way. If the return is filed on time, once the Direct Debit is set up and the return submitted, payments are collected automatically 3 working days after the payment deadline on the return; if the return is filed late, the payment is taken 3 days after the return is filed. ^[3] Direct Debit cannot be used for payments over £20 million, for payments from an overseas bank account, under a VAT payments on account arrangement, or by businesses approved to send paper VAT returns.

Other methods include paying directly from a UK bank account with Faster Payments, CHAPS or Bacs. For a VAT bill, the payment reference is the 9-digit VAT registration number, without spaces, while a VAT surcharge or penalty is paid using a separate 14-character reference number starting with X. A card payment is accepted on the date it is made, even on weekends and bank holidays, but a personal credit card cannot be used.

Faster Payments usually reach HMRC on the same or next day, including weekends and bank holidays, while Bacs payments usually take 3 working days. ^[3]

Can I still get VAT refunds in the UK?

Yes. A VAT-registered business can reclaim VAT on eligible items it buys for use in the business, in the VAT return, but only the business proportion if items are also for personal use, and not on goods and services used to make VAT-exempt supplies; under the Flat Rate Scheme VAT on purchases generally cannot be reclaimed, except for certain capital assets over £2,000. ^[4] VAT cannot be reclaimed using an invalid invoice, a pro-forma invoice, a statement or a delivery note.

If the total VAT due on the return is less than the VAT reclaimed, HMRC credits the account and repays the balance, subject to any enquiries it may need to make. HMRC does not use Direct Debit bank account details for repayments, so the registration details in the VAT online account need updating for a repayment to go into a bank account; otherwise HMRC sends a cheque.

The guide to input VAT and output VAT covers how the amount owed or repaid is worked out.

Missing the date: assessments, penalties and interest

If the filing deadline is missed, HMRC sends a VAT notice of assessment of tax showing how much VAT it thinks is owed. For accounting periods that started on or after 1 January 2023, there are separate penalties for late submission and late payment. Under that system, each late return earns a penalty point, and once the penalty point threshold is reached there is a £200 penalty, with a further £200 penalty for each later late submission while at the threshold.

For a late payment in those periods, the penalty amount goes up after 16 days and again after 31 days, and late payment interest is charged from the first day the payment is overdue until it is paid in full. For accounting periods that started on or before 31 December 2022, HMRC records a default on the account when a return or payment is late. A business having difficulty paying by the deadline should contact HMRC as soon as possible.

Estimated figures and correcting earlier returns

A business that cannot give accurate figures on its VAT return can ask HMRC for permission to use estimated figures, but it needs a good reason. If permission is given, there is no penalty unless the deadline is missed or there is a careless or deliberate error. The correct figures normally have to be given in the next VAT return.

Separately, non-deliberate errors in returns for the preceding 4 years can be corrected in the next return when the net value of the errors is £10,000 or less, or between £10,000 and £50,000 but less than 1% of the total value of sales, while deliberate errors must be reported separately.