How to File a VAT Return: Deadlines, Boxes and Penalties

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Last updated 23 October 2026. Written by the Limited Company Accountant UK team, part of Accotax. Figures are for the 2026/27 tax year; always check GOV.UK for the latest rates.

Short answer: A VAT return reports the VAT you charged and the VAT you paid in a period, usually three months. It must be filed online through Making Tax Digital software, and both the return and payment are due one month and seven days after the end of the period. Late filing is penalised through a points-based system.

Key facts

Return and payment due	1 month and 7 days after period end
Filing method	Making Tax Digital compatible software
Boxes	Nine boxes in total
Penalty points threshold	Quarterly filers: 4 points
Late payment penalty	Starts after 15 days, increasing with time

What a VAT return is

A VAT return is a summary that you send to HMRC at the end of each VAT period, showing how much VAT you charged to your customers, how much VAT you were charged by your suppliers, and the difference between the two. Most small companies file four returns a year. The result is either a payment to HMRC or, if your purchases carried more VAT than your sales, a repayment.

The return does not list every transaction. It gives totals in nine boxes, which are calculated from your digital records. Because the totals come straight from accounting software, the quality of your bookkeeping determines the accuracy of the return.

The nine boxes explained

The return has nine boxes, and understanding them makes it easier to check the figures.

• **Box 1:** VAT due on sales and other outputs.

• **Box 2:** VAT due on acquisitions from other countries, which is rare after Brexit except for Northern Ireland trade.

• **Box 3:** the total of boxes 1 and 2.

• **Box 4:** VAT reclaimed on purchases and other inputs.

• **Box 5:** the net VAT to pay or reclaim, which is the difference between boxes 3 and 4.

• **Box 6:** total value of sales and outputs, excluding VAT.

• **Box 7:** total value of purchases and inputs, excluding VAT.

• **Box 8:** total value of supplies to the EU, only for Northern Ireland goods.

• **Box 9:** total value of acquisitions from the EU, again for Northern Ireland goods.

Deadlines and payment

The return and the payment are both due one month and seven days after the end of the VAT period. For a quarter ending 31 March, the deadline is 7 May. If you pay by Direct Debit, the money is taken a few days later, but you must still file the return by the deadline and set up the Direct Debit in advance.

Payments by other methods must arrive in HMRC’s account by the deadline. Faster Payments usually clear the same day or the next, but weekends and bank holidays can delay other methods. Pay a few days early to be safe, and diarise each deadline at the start of the year.

Making Tax Digital for VAT

All VAT-registered businesses must keep digital records and send returns using software that connects to HMRC. You cannot file by typing figures into the old online form. Suitable software includes Xero, QuickBooks, FreeAgent and several others, as well as spreadsheet bridging tools.

Sign up for Making Tax Digital for VAT through your HMRC account, authorise your software, and then file the return from within the software. Your accountant can do this for you with your authorisation. Keep the digital records for at least six years.

The points-based penalty system for late returns

HMRC now uses a points system for late VAT returns. Each time you submit a return late, you receive one penalty point. When your points reach a threshold, which is four for quarterly filers, you receive a £200 penalty, and a further £200 for each late return while you are at the threshold. Points expire after 24 months of compliance.

The system means one late return will not cost money, but repeated lateness will. Filing on time and keeping your points at zero is far cheaper than recovering from a penalty.

Late payment penalties and interest

Late payment is penalised separately. If you pay within 15 days, there is no penalty. If the VAT is still unpaid after 15 days, a first penalty applies at a percentage of the outstanding amount, and a second penalty is added if it remains unpaid after 30 days. Daily interest applies from the due date.

If you cannot pay, contact HMRC before the deadline, because a payment plan can reduce or avoid penalties. Late filing and late payment are treated separately, so you can face both.

Common errors to avoid

Frequent mistakes include using the wrong VAT period dates, mixing up gross and net figures in boxes 6 and 7, claiming VAT on blocked items such as entertainment, forgetting to include the reverse charge on overseas services, and filing a return before all invoices for the period have been entered.

Errors that are discovered later can be corrected on a future return if the net error is below the threshold, or by writing to HMRC for larger errors. Spotting problems early is easier than correcting them after submission.

How an accountant helps

An accountant can prepare and file the return each quarter, review the figures for errors, and remind you of the deadline and the payment. With a fixed fee package, the cost is predictable, and the risk of penalties is much lower. You still need to keep your records up to date, but the technical part of the return is handled for you.

A worked example of completing a return

A consultancy sells £30,000 of services in the quarter, charging £6,000 of output VAT, and buys £4,000 of costs with £800 of VAT. Box 1 shows £6,000, box 2 is zero, box 3 is £6,000, and box 4 is £800. Box 5 is therefore £5,200, which is the payment due. Box 6 shows £30,000, box 7 shows £4,000, and boxes 8 and 9 are zero.

Once the figures are checked, the return is submitted through the software, which sends it to HMRC and gives a confirmation. The payment of £5,200 must reach HMRC by the deadline. Keeping a copy of the return and the confirmation in your records closes the process.

What to do if you made a mistake

If you find an error in a submitted return, you can correct it. If the net error is under £10,000, or under 1% of box 6 sales up to a limit of £50,000, you can adjust it on your next return. Otherwise, you must tell HMRC separately using the error correction process. Act promptly, because penalties for careless errors are lower when you disclose the mistake voluntarily.

Keep a note of what went wrong and how you fixed it. Your accountant can also help identify the cause, such as a mis-coded supplier, so it does not repeat.

Frequently asked questions

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