Filing your VAT return on time is a legal requirement for UK VAT-registered businesses. However, many business owners are unsure what actually happens if they miss the deadline — or submit their return a few days late.
In this guide, we explain VAT return deadlines, what penalties apply if you miss them, and how HMRC’s new VAT penalty system works.
When Is the VAT Return Deadline?
In most cases, your VAT return must be submitted:
- 1 month and 7 days after the end of your VAT accounting period
- For example, if your VAT period ends on 31 March, your deadline is 7 May
Both the VAT return submission and payment must be completed by this date.
Can You Submit a VAT Return Late?
Yes, you can submit a VAT return after the deadline — but this does not mean there are no consequences.
HMRC records late submissions and applies penalties depending on:
- How late the return is
- How often you submit returns late
- Whether VAT is owed
HMRC’s New VAT Penalty System (Points-Based)
HMRC now uses a points-based penalty system for late VAT returns.
How It Works:
- Each late submission earns 1 penalty point
- When you reach a penalty threshold, HMRC issues a £200 fine
- Additional late returns after that result in £200 penalties each time
Penalty Thresholds:
- Quarterly VAT returns: 4 points
- Monthly VAT returns: 5 points
- Annual VAT returns: 2 points
Penalty points expire after a period of compliant behaviour.
What If You Submit the Return but Pay VAT Late?
Late payment penalties are separate from late submission penalties.
HMRC Late Payment Charges:
- 0–15 days late: No penalty if paid in full
- 16–30 days late: 2% of VAT owed
- 31 days or more: Additional 2% + daily interest
Interest is charged from the due date until payment is made in full.
What If You Cannot Pay Your VAT Bill?
If you cannot pay on time, you should contact HMRC immediately.
You may be able to arrange a Time to Pay (TTP) agreement, which:
- Allows you to pay VAT in instalments
- Prevents further penalties if agreed early
- Protects your compliance record
Ignoring the deadline without contacting HMRC often results in higher penalties.
How to Avoid VAT Penalties
Common steps that help businesses stay compliant include:
- Submitting VAT returns early
- Using accounting software compatible with Making Tax Digital (MTD)
- Setting calendar reminders
- Keeping VAT records up to date throughout the quarter
Final Thoughts
Submitting your VAT return late can quickly lead to penalties, even if no VAT is owed. HMRC’s points-based system means repeat lateness increases risk, so staying compliant is essential.
If you are unsure about your VAT deadlines or penalties, it’s always better to act early rather than wait until after the deadline has passed.
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