Last updated: 3 July 2026
To submit a VAT return in the UK, you now file it digitally through Making Tax Digital (MTD) compatible software, not the old HMRC website, and it is due one calendar month and seven days after the end of your VAT accounting period. In short: keep your records digitally, let your software calculate the nine boxes, check the figures, submit through the software, and pay HMRC by the same deadline.
That is the whole process in one sentence, but each step has a catch that trips people up, and the rules changed more than most business owners realise. Since April 2022, every VAT-registered business has to use MTD software, so the familiar “log in to HMRC and type the numbers in” route no longer exists. This guide walks through the full process step by step, whatever software you use, and covers the parts the software vendors tend to skip: what each box means, when and how to pay, what to do if you get a figure wrong, and the penalties for filing late. Every figure here is checked against GOV.UK.
Key takeaways (TL;DR)
- You must use MTD-compatible software. Since April 2022, all VAT-registered businesses file through software or bridging software. You cannot submit a VAT return on the old HMRC portal anymore.
- The deadline is one calendar month plus seven days after the end of your VAT period, for both submitting the return and paying HMRC.
- Your software calculates the nine boxes from your digital records. Your job is to keep the records clean and check the figures before you submit.
- File on time even if you cannot pay. Late submission and late payment are penalised separately, and submitting on time avoids the points penalty even on a nil or repayment return.
- Late filing uses a points system: a £200 penalty once you hit your threshold (2 points for annual filers, 4 for quarterly, 5 for monthly).
What do you need to submit a VAT return?
Before you file, you need five things: your VAT registration number, MTD-compatible software, your VAT records kept in digital form, your Government Gateway sign-in, and the figures for the period. Miss any one and the submission stalls, so gather them first.
- Your 9-digit VAT registration number, from your VAT registration certificate or online account.
- MTD-compatible software (full accounting software such as Xero, QuickBooks or Sage, or bridging software that connects a spreadsheet to HMRC).
- Your VAT records in digital form for the period, with a digital link from records to return.
- Your Government Gateway user ID and password to authorise the software.
- The sales and purchase figures for the accounting period, which the software totals for you.
If keeping digital records and reconciling the figures each quarter is the part you dread, that is exactly the work a good bookkeeping and cloud accounting service takes off your desk, so the return is ready to file rather than a scramble.
Can you still submit a VAT return on the HMRC website?
No. Since April 2022, you cannot submit a VAT return through the old HMRC online portal. Making Tax Digital for VAT became mandatory for every VAT-registered business, regardless of turnover, so submission has to go through MTD-compatible software. This is the single biggest change people miss, and it catches out anyone who has not filed for a while or who registered voluntarily below the threshold.
There is one more thing that changed quietly. You no longer sign yourself up for MTD: HMRC now signs up all VAT-registered businesses automatically unless they are exempt or have applied for exemption. New registrations are enrolled from the start. What you still have to do is choose compatible software and grant it authority to talk to HMRC on your behalf. A small number of businesses can apply for exemption (for example on grounds of age, disability, remoteness or religious belief), but for almost everyone, software is now the only route.
How to submit your VAT return: step by step
Here is the full process from records to payment. The exact buttons differ between software packages, but every MTD-compatible tool follows these seven steps.
Step 1: Keep your VAT records digitally. MTD requires you to record each transaction digitally, with a digital link running from your records through to the return, so figures are not manually retyped along the way. If you use full accounting software, this happens as you invoice and record purchases. If you use spreadsheets, you need bridging software to keep the link intact.
Step 2: Use MTD-compatible software. Check your software is on HMRC’s list of compatible products. Full accounting software (Xero, QuickBooks, Sage, FreeAgent and others) keeps records and files in one place. Bridging software does one job: it connects a spreadsheet to HMRC so you can submit. Either is fine, as long as it is genuinely compatible.
Step 3: Authorise the software. The first time you file, you grant your software permission to interact with HMRC, using your Government Gateway user ID and password. You usually only do this once every 18 months. If your accountant files for you, they use an agent services account instead, and you approve their request.
Step 4: Let the software calculate your figures. The software pulls your sales and purchases from your digital records and works out the nine boxes of the VAT return automatically, including the total VAT you owe or are owed. This is where clean bookkeeping pays off: the return is only as accurate as the records behind it.
Step 5: Check the return before you submit. Review the figures against what you expect for the period. Look for missing invoices, purchases coded to the wrong VAT rate, personal expenses that should not be reclaimed, and any unusually high or low box. It is far easier to fix a figure now than to correct it later.
Step 6: Submit through the software. Accept the legal declaration and submit. The software sends the return to HMRC and returns a confirmation and a receipt reference. Keep that reference. You can only submit once per period, so make sure the figures are right first.
Step 7: Pay HMRC by the deadline. Submitting the return does not pay the bill. Pay the amount in box 5 by the same deadline (see below), or if you are due a repayment, HMRC will refund it, usually within 30 days. Once this is done, that period is complete.
If any of that feels like a lot to hold together every quarter, our accounting services for businesses run the whole cycle, from bookkeeping to filing to reminders, so nothing slips.
What are the nine boxes on a VAT return?
A UK VAT return has nine boxes, and your software fills them from your records, but it helps to know what each one means so you can sanity-check the result. Here is what goes where.
| Box | What it shows |
|---|---|
| Box 1 | VAT you charged on sales and other outputs |
| Box 2 | VAT due on acquisitions of goods from the EU (Northern Ireland only) |
| Box 3 | Total VAT due (Box 1 plus Box 2) |
| Box 4 | VAT you can reclaim on purchases and other inputs |
| Box 5 | Net VAT to pay HMRC or reclaim (the difference between Box 3 and Box 4) |
| Box 6 | Total value of sales, excluding VAT |
| Box 7 | Total value of purchases, excluding VAT |
| Box 8 | Total value of goods supplied to the EU (Northern Ireland only) |
| Box 9 | Total value of goods acquired from the EU (Northern Ireland only) |
Box 5 is the number that matters most day to day: if it is positive you pay HMRC, and if it is negative you are due a refund. For most businesses in Great Britain, boxes 2, 8 and 9 are zero, since they relate to Northern Ireland trade in goods with the EU.
When is the VAT return deadline?
Your VAT return and payment are both due one calendar month and seven days after the end of your VAT accounting period. Most businesses file quarterly, so if your quarter ends on 31 March, your return and payment are due by 7 May. The deadline is the same for a nil return or a repayment return: you still have to file.
| VAT period ends | Return and payment due |
|---|---|
| 31 March | 7 May |
| 30 June | 7 August |
| 30 September | 7 November |
| 31 December | 7 February |
Two exceptions change the timing. If you use the Annual Accounting Scheme, you file once a year with interim payments on account. If you pay by direct debit, HMRC collects the amount about three working days after the deadline, so set the direct debit up at least three working days before you file. You can always check your own deadlines in your VAT online account, since they are set by your specific accounting periods.
How do you pay your VAT?
Pay your VAT bill using your 9-digit VAT registration number as the payment reference, through any of HMRC’s accepted methods. The right one depends on how quickly the money needs to reach HMRC, because different methods clear at different speeds.
| Payment method | How long it takes |
|---|---|
| Direct debit | Collected about 3 working days after the deadline (set up 3 working days ahead) |
| Faster Payments (online or phone banking) | Same or next day |
| CHAPS | Same working day if within your bank's cut-off |
| Bacs | 3 working days |
| Debit or corporate credit card online | 3 working days |
Direct debit is the simplest for most businesses, because HMRC collects the correct amount automatically once the return is filed, which removes the risk of forgetting. Whichever method you use, always quote your VAT number with no spaces, or the payment can be misapplied. If cash flow is tight and you cannot pay in full, file the return on time anyway and speak to HMRC about a Time to Pay arrangement, which is covered in our guide on how to contact HMRC about Corporation Tax and other taxes.
What if you make a mistake on your VAT return?
If you spot an error after submitting, how you fix it depends on the size. If the net value of the errors is £10,000 or less (or up to 1 percent of your box 6 figure, capped at £50,000), you can simply adjust it on your next VAT return. If the net error is above that, you must report it separately to HMRC using form VAT652 rather than rolling it into the next return.
Either way, keep a clear record of what the error was, how you found it, and how you corrected it. Careless mistakes can attract penalties, but genuine errors that you correct properly usually do not. This is one more reason to review the return at step 5 rather than after submission, since you can only file a return once per period and corrections are more work than a careful check.
What are the penalties for a late VAT return?
Late VAT returns are penalised under a points-based system: you get one penalty point for each late submission, and once you reach the threshold for your filing frequency, HMRC charges a £200 penalty. Crucially, this applies even to a nil return or a repayment return, so filing on time matters even when you owe nothing.
| Filing frequency | Points threshold | Penalty at threshold |
|---|---|---|
| Annual | 2 points | £200, then £200 per further late return |
| Quarterly | 4 points | £200, then £200 per further late return |
| Monthly | 5 points | £200, then £200 per further late return |
Late payment is penalised separately and has become more expensive since the rates rose in April 2025. There is no penalty if you pay within 15 days of the deadline, but interest still runs from day one. Pay between 16 and 30 days late and you face a first penalty of 3 percent of the outstanding VAT at day 15, plus a further 3 percent of what is still outstanding at day 30. From day 31, a second penalty accrues daily at an annual rate of 10 percent until the balance is cleared, and late payment interest runs throughout at HMRC’s published rate. The clear takeaway: always submit on time, and pay as much as you can as soon as you can. HMRC’s own guidance on VAT late-submission penalty points sets out the full detail, including how to reset your points once you are back in compliance.
MTD software: full accounting or bridging, which should you use?
For most businesses, full accounting software is the better choice, because it keeps your records and files your return in one place. Bridging software suits businesses that want to keep working in spreadsheets. The right answer depends on how you already run your books.
Full accounting software (Xero, QuickBooks, Sage, FreeAgent and similar) records your invoices and purchases as you go, calculates VAT automatically, and submits the return directly to HMRC, while also giving you invoicing, bank feeds and reporting. Bridging software does one narrow job: it links an existing spreadsheet to HMRC so the figures can be submitted while keeping the digital link MTD requires. Bridging is a valid, compliant option, but it does less to reduce errors, because the underlying records still live in a spreadsheet you maintain by hand. If you are choosing a system from scratch, full cloud software is usually worth it, and our cloud accounting and finance support can set it up and run it with you.
Common VAT return mistakes to avoid
Most VAT return errors come from the records, not the submission, so the fixes are about bookkeeping discipline. Reclaiming VAT on things you cannot, such as business entertainment or the VAT element of personal expenses, is a frequent one. So is coding purchases to the wrong VAT rate, missing the deadline on a repayment return because it “did not matter,” and forgetting that fuel, mileage and partial exemption have their own rules. The other big one is leaving it to the last day, which turns a small query into a missed deadline. A monthly reconciliation, rather than a quarterly panic, removes most of these at the source, which is a large part of what outsourced bookkeeping is for.
Can someone submit my VAT return for me?
Yes. An accountant or bookkeeper can prepare and submit your VAT return on your behalf once you authorise them as your agent, and for many businesses this is the least stressful option. Your agent uses an agent services account, requests authorisation to act for you, and then handles the records, the figures, the submission and the deadline reminders, so VAT becomes something that simply happens rather than something you chase.
This is core to what we do. Acenteus provides VAT return, bookkeeping and cloud accounting support for UK businesses and practices, keeping digital records clean, filing every return on time through compatible software, and making sure you never lose a £200 penalty to a missed deadline. If VAT has become a recurring source of stress, get in touch and we will take it off your plate. It also sits within our wider tax compliance support, so VAT, payroll and Corporation Tax are handled together rather than in separate silos.
Frequently Asked Questions (FAQ)
You submit a VAT return through Making Tax Digital compatible software: keep your records digitally, let the software calculate the nine boxes from those records, check the figures, accept the declaration, and submit to HMRC through the software. You then pay the amount in box 5 by the same deadline. Since April 2022 you cannot file through the old HMRC portal, so software or bridging software is required.
No. The old HMRC online VAT portal closed for regular filing when Making Tax Digital for VAT became mandatory for all VAT-registered businesses in April 2022. You now submit through MTD-compatible software or bridging software. HMRC automatically signs businesses up to MTD, but you still choose the software and grant it authority to file for you.
Your VAT return and payment are due one calendar month and seven days after the end of your VAT accounting period. For a quarter ending 31 March, that means 7 May. The deadline is the same whether you owe VAT, are due a refund, or are filing a nil return. If you pay by direct debit, HMRC collects a few working days after the deadline.
You need software that is compatible with Making Tax Digital for VAT. This can be full accounting software such as Xero, QuickBooks, Sage or FreeAgent, which keeps records and files in one place, or bridging software, which connects an existing spreadsheet to HMRC. Check the product is on HMRC's list of compatible software before you rely on it.
Bridging software is a simple tool that connects a spreadsheet to HMRC so you can submit a Making Tax Digital VAT return while keeping the digital link the rules require. It suits businesses that prefer to keep their records in a spreadsheet. It is compliant, but it does less than full accounting software to reduce errors, because the underlying records are still maintained by hand.
Yes, in almost all cases. Since April 2022, Making Tax Digital for VAT applies to every VAT-registered business regardless of turnover. A small number of businesses can apply for exemption, for example on grounds of age, disability, remoteness of location or religious belief. Unless HMRC has granted you an exemption, you must keep digital records and file through compatible software.
Pay using your 9-digit VAT registration number as the reference, through direct debit, Faster Payments, CHAPS, Bacs, or debit or corporate credit card. Direct debit is simplest because HMRC collects the correct amount automatically after you file. Allow for clearing times: Faster Payments is same or next day, while Bacs and card payments take about three working days.
You receive one penalty point for each late return. Once you reach the threshold for your filing frequency (2 points for annual, 4 for quarterly, 5 for monthly), HMRC charges a £200 penalty, and a further £200 for each subsequent late return while you are at the threshold. This applies even to nil and repayment returns, so always file on time.
There is no penalty if you pay within 15 days, though interest accrues from the due date. Between 16 and 30 days late, you pay 3 percent of the VAT outstanding at day 15, plus a further 3 percent of what is outstanding at day 30. From day 31, a second penalty builds up daily at an annual rate of 10 percent until you pay. These rates rose in April 2025.
Yes, and you must. A nil return (where no VAT is due) and a repayment return (where you are owed money) both still have to be filed by the deadline. Missing the deadline on a nil or repayment return earns a penalty point in exactly the same way as a return where you owe VAT.
If the net value of the error is £10,000 or less (or up to 1 percent of your box 6 figure, capped at £50,000), adjust it on your next VAT return. If it is larger, report it to HMRC separately on form VAT652. Keep a clear record of the error and the correction. Genuine, properly corrected errors usually avoid penalties, but careless ones can attract them.
You must register for VAT when your taxable turnover exceeds £90,000 in any rolling 12-month period, or if you expect to exceed it in the next 30 days. You can also register voluntarily below the threshold. Once registered, you must keep digital records and submit VAT returns through Making Tax Digital compatible software from the start.
Yes. Once you authorise an accountant or bookkeeper as your agent, they can prepare and file your VAT return through their agent services account, manage your digital records, and handle deadlines on your behalf. For many businesses this is the simplest way to stay compliant and avoid missed-deadline penalties.
If your return shows a repayment (box 5 is in your favour), HMRC usually refunds it within 30 days of receiving the return, paid to your bank account. HMRC may run checks first, especially on larger or first-time claims, which can extend the time. Making sure your bank details and records are correct helps avoid delays.
