VAT Returns
How to complete and submit a VAT return, including Making Tax Digital requirements and common errors to avoid.
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How to submit a VAT return
VAT returns must be submitted via Making Tax Digital. Here is what goes in each box and what to check before you file.
VAT return deadlines
When VAT returns are due (one calendar month and seven days after the quarter end) and how to find your specific deadlines.
What a VAT return actually reports
Nine boxes summarising the period: VAT charged on your sales, VAT paid on your purchases, and the difference — payable to HMRC or reclaimable from them. The figures come from your digital records; under Making Tax Digital the software compiles the boxes, and your job is to make sure what feeds them is right.
Filing is one month and seven days after the period end, through MTD-compatible software only. The old portal route is gone.
Where returns go wrong
The recurring errors: reclaiming VAT without a valid VAT invoice, reclaiming on cars and client entertainment (both generally blocked), missing the reverse charge on services bought from abroad or construction-industry supplies, fuel used privately without the scale charge, and claiming input VAT on exempt-activity costs.
Most of these are categorisation habits inside the bookkeeping, which is why the fix is rarely 'check the return harder' and usually 'code the transactions right all quarter'.
Correcting an error you find later
Small net errors — under £10,000, or up to £50,000 within a percentage-of-turnover limit — can simply be adjusted on the next return. Larger errors, or anything deliberate, must be disclosed to HMRC separately on form VAT652.
Unprompted correction keeps penalties at the bottom of the range, and often at nil for careful behaviour. Finding your own errors is cheap; having HMRC find them is not.
Schemes that change the arithmetic
Cash accounting lets smaller businesses account for VAT when money moves rather than when invoices are raised — kinder to cash flow when customers pay slowly. The flat rate scheme swaps input-VAT recovery for a fixed percentage of turnover; simpler, sometimes cheaper, often not since the limited-cost-trader rules. Annual accounting trades four returns for one plus instalments.
Scheme choice is a numbers question, reviewed as the business changes — the scheme that suited £120,000 of turnover can quietly cost money at £400,000. We review it as part of the Annual Compliance Review.
Frequently asked questions
When is my VAT return due?
One calendar month and seven days after the end of the VAT period, for both return and payment — a 31 March quarter end means 7 May. Direct debit payments are collected a few working days later, but the return deadline is unchanged.
Can I still file using spreadsheets?
Yes, if the spreadsheet is your digital record and bridging software carries the figures into HMRC through digital links. Retyping totals into a filing screen is what MTD prohibits — the chain from record to return must stay digital.
What if I can't file because records are incomplete?
File the best supportable figures on time and correct later through the error process, rather than filing late — late returns earn penalty points regardless of the reason. Then fix the record process, because 'incomplete at the deadline' is a quarterly recurring risk.
Do I file a return if I owe nothing or am owed a refund?
Yes — every registered business files every period: nil returns and repayment returns included. Repayment returns are paid automatically after any checks; a pattern of repayments (exporters, zero-rated sellers) is normal and sometimes worth monthly returns.