VAT returns are a key responsibility for VAT-registered businesses in the UK. Completing and submitting VAT returns correctly is essential to avoid penalties and ensure compliance with HMRC regulations. But when is VAT due? What are the VAT return deadlines? And how can you make the process more efficient?This guide covers VAT return submission, deadlines, payment processes, and common mistakes to avoid, helping businesses stay on top of their VAT obligations.
1. What is a VAT Return?
A Value Added Tax (VAT) return is a report submitted to HMRC that details the VAT a business has charged on sales and the VAT it has paid on purchases. The return determines whether the business needs to pay VAT to HMRC or claim a refund.
Who Needs to Submit a VAT Return?
Any business registered for VAT must file VAT returns, usually on a quarterly basis. Businesses earning over £85,000 in taxable turnover must register for VAT and comply with Making Tax Digital (MTD) rules.
2. VAT Return Deadlines: When is VAT Due?
Meeting VAT return deadlines is crucial to avoid penalties. The deadline for VAT return submission and payment is one month and seven days after the end of the VAT accounting period.
VAT Return Due Dates (Standard Accounting Periods)
- January-March VAT period → Due by 7th May
- April-June VAT period → Due by 7th August
- July-September VAT period → Due by 7th November
- October-December VAT period → Due by 7th February
If a business follows the Annual Accounting Scheme, VAT returns are submitted once a year, but advance payments are required throughout the year.To avoid missing deadlines, businesses should use VAT accounting software or professional VAT services, such as those offered by Cloud Co Books.
3. How to Complete a VAT Return?
Information Required for VAT Returns
A VAT return includes the following key details:
- Total sales and purchases for the VAT period
- Amount of VAT charged on sales (output tax)
- Amount of VAT paid on purchases (input tax)
- The final VAT amount owed to HMRC or refundable
Businesses must ensure accurate VAT calculations to avoid errors that could trigger HMRC audits.
How to Calculate VAT Payable or Reclaimable?
- If VAT charged (output tax) > VAT paid (input tax) → Business owes VAT to HMRC.
If VAT paid (input tax) > VAT charged (output tax) → Business can claim a VAT refund.
4. VAT Return Submission: Online Filing & Making Tax Digital (MTD)
All VAT-registered businesses must submit VAT returns online through HMRC’s Making Tax Digital (MTD) system. This means businesses must use HMRC-approved VAT accounting software for filing.
Steps to Submit a VAT Return Online
- Log in to your HMRC VAT online account.
- Enter your VAT figures accurately.
- Submit the VAT return before the VAT return deadline.
- Pay any VAT due using an approved payment method.
Using a professional VAT return service, like Cloud Co Books, ensures accurate filing and timely submission.
5. VAT Payment: Methods & What Happens if You Miss the Deadline?
How to Pay VAT to HMRC?
VAT payments must reach HMRC by the VAT deadline. The most common payment methods include:
- Direct Debit (recommended for automatic payments)
- Online banking (Faster Payments, CHAPS, BACS)
- Debit or corporate credit card payments
Penalties for Late VAT Returns & Payments
If a business misses the VAT return due date or fails to pay VAT on time, it may face:
- Late payment penalties
- Interest on outstanding VAT
- Surcharge penalties for repeated late payments
To avoid penalties, businesses should file early and use automated reminders.
6. Common VAT Return Mistakes & How to Avoid Them
Some frequent VAT return errors include:
- Incorrect VAT calculations (leading to overpayment or underpayment)
- Missing the VAT return deadline due to poor record-keeping
- Filing incorrect VAT figures without checking invoices
- Not using MTD-compliant VAT software
Outsourcing VAT return services to a professional VAT accountant can help businesses avoid costly mistakes and ensure compliance.
7. Should You Use an Accountant for VAT Returns?
Filing VAT returns correctly and on time is essential to avoid penalties and cash flow issues. A professional VAT accountant can:
- Ensure accurate VAT calculations
- Submit VAT returns before the deadline
- Help businesses claim VAT refunds efficiently
- Provide VAT planning and advisory services
At Cloud Co Books, we specialize in VAT return filing, VAT compliance, and tax planning, ensuring businesses meet their VAT obligations without hassle.
Conclusion
Understanding VAT return submission, deadlines, and payment processes is essential for VAT-registered businesses. Filing on time, using HMRC-compliant VAT software, and ensuring accuracy can prevent costly errors and penalties.
For hassle-free VAT return filing, Cloud Co Books offers expert VAT services, ensuring your business remains compliant and efficient.