VAT Return Due Dates: Stay Compliant and Avoid Penalties

VAT due date deadlines are non-negotiable and essential to know. From the moment you register your company for VAT, you must complete a VAT return regularly and ensure that HMRC receives that return on time. If you don’t, you could face penalties and fines that can cost your company money and potentially damage your reputation.

When you first start paying VAT, figuring out your deadlines and planning your VAT return submissions can seem daunting, but once you’ve set up your systems and admin, it will get easier. You will get accustomed to logging your expenses and keeping track of your VAT invoices and expenditure.

Top tip: Log into your HMRC VAT Online Account to find out when you need to submit your VAT returns and ensure that your payments are up to date.

VAT Return Deadlines

Did you know that the deadline for submitting your VAT return online and paying your VAT is the same? This means you can’t afford to be late submitting your return because that could make you late making a payment. Depending on the type of payment method you use, a late payment could mean that your funds don’t reach HMRC on time.

To avoid unnecessary stress, it’s a good idea to diarise your VAT return deadlines so you can meet the deadline and give yourself time if there are any unexpected issues.

Your online VAT account will tell you exactly what deadlines you have to work towards, but here are some of the most common deadlines and dates you should keep in mind:

Monthly VAT Return Due Dates

If you are expected to submit a monthly VAT return or pay your VAT every month, then you need to submit your VAT return one month and seven days after the end of your VAT period. If you submit your VAT bill for the month of January, then you will need to complete and file your VAT return by 07 March. That’s one month and seven days from the end of January.

Companies that are regular repayment traders or have a specific arrangement with HMRC tend to file their VAT returns monthly. This means you will submit your VAT returns and payments 12 times a year.

Quarterly VAT Return Due Dates

The most common form of VAT return is quarterly, and the most common timeframes for this are January 01 – March 31, April 01 – June 30, July 01 – September 30, and October 01 – December 31. However, these can change and may be affected by different HMRC regulations and factors, so always check your VAT deadlines to ensure you know precisely when HMRC expects you to submit your returns.

Quarterly VAT returns follow the same process as monthly VAT returns in that you need to submit your return and make a payment on the same day as your submission deadline, which is one month and seven days from the end of your VAT period. This means you will submit your VAT returns and payments four times a year.

The rule of thumb is simple: Your VAT return and payments are due one month and seven days from the end of your last accounting period.

Annual VAT Return Due Dates

Some companies are part of the VAT Annual Accounting Scheme, which means they are not expected to submit their VAT returns and payments on a quarterly basis. The Annual Accounting Scheme allows companies to submit one VAT return every year and to make payments towards their VAT bill based on their last return. They will pay an estimated amount of VAT in their first year.

While submitting VAT only once a year feels like a lot less admin, it also means that any refunds your business is due from your VAT return will only be paid to you annually when you submit your VAT return. Companies eligible for this scheme have a VAT taxable turnover of less than £1.3 million and only need to submit their VAT returns and payments once a year.

Note: The deadline for submitting your VAT return annually will be very different from quarterly and monthly, so check in with your profile online to ensure you get it right.

Penalties for Missing VAT Return Due Dates

Late VAT returns and payments are now subject to a penalty points system designed to make it easier for companies to manage their VAT returns and not end up facing extensive fines and penalties for making a single mistake. 

The penalty point system issues one point to your company for every missed deadline. These points will expire after two years as long as you’ve not exceeded the penalty threshold. After that, you will have to submit your VAT returns and payments on time for a set period of time before your points are reset to zero.

Late Filing Penalties

The VAT return filing penalty system came into effect on 01 January 2023 and you will be affected by this penalty system if you paid your VAT late or submitted your VAT return late. Every time you submit your VAT return late, you will receive one penalty point until you reach your penalty point threshold.

The penalty point threshold is based on your VAT accounting period. Annual VAT returns get 2 penalty points, quarterly get 4 penalty points, and monthly earn 5 penalty points. 

For example, if you submit two annual VAT returns late, you will have reached your VAT penalty threshold, and you will receive a penalty fine of £200. If you submit your next return on time, you stay at your threshold but do not receive a fine. However, if you submit the next return late, because you are still at the threshold you will get another penalty fine of £200.

There are always exceptions to the rules, however, so if your accounting period is in a different period than monthly, quarterly or annual, you will have different rules you need to follow. You can find a breakdown of these rules here.

Remember: You can appeal a penalty or a point, and if HMRC believes your reasoning is fair or your situation complex, they may cancel or amend your penalties.

Interest Charges on Late Payments

You will get a penalty point and interest on your late VAT payments if you have missed your deadline. This interest is charged from the day the VAT payment is marked as overdue and continues to gather momentum until you pay this amount in full. The current interest rate is the Bank of England base rate plus 2.5%. Your VAT return, an amended VAT return, a corrected VAT return, a VAT assessment undertaken by HMRC, a late payment penalty, a late submission penalty, and a missed VAT payment all qualify for interest charges.

Additional Penalties for Inaccurate Returns

You can be liable for additional penalties if your VAT return has been incorrectly completed or does not include correct information. Some key concerns you need to be aware of when it comes to penalties on VAT returns include: understated VAT, over-claimed VAT, and under-assessed VAT.

HMRC keeps an extensive list of all the duties and taxes that can be liable for an inaccuracy penalty here.

Tips for Meeting VAT Return Due Dates

With all these penalties in mind, you need to ensure you don’t end up with fines or sitting on the VAT penalty threshold. This just adds to your business costs, your admin and your stress. So, here are some tips to help you meet your VAT return due dates.

Keep Accurate Records

Considering that the penalties for incorrect information can be very high and that HMRC is very strict about enforcing them, your most important step is to ensure that you keep accurate and accessible records.

As a business, you need to keep and maintain records of all your VAT-relevant transactions to submit an accurate and relevant VAT return. These should be kept in a digital format and in a secure space and easy to navigate so you can always find the information you need on demand.

Understand your VAT Reporting Requirements

Spend time inside your VAT online portal so you know exactly what type of VAT reporting structure you have – monthly, quarterly, annually, specialised – and what deadlines you need to meet. Make these deadlines part and parcel of your business life so you are always ahead of the paperwork.

Work with an accountant or use a professional accounting software solution to manage your paperwork, your filing, and your VAT returns so the process is easy, accurate, and up-to-date.

Organise your Finances

When your finances are clean and shiny and everything is accessible, visible, on track, and on time, then you are in a far better position to deliver your VAT return online. You will be able to find the information you need quickly, and you will catch any errors that may have crept into your VAT return. HMRC expects you to use an accredited accounting solution to submit and manage your VAT, and this will also help you to organise your finances so your VAT returns aren’t arduous and excessively time-consuming.

Stay Compliant with VAT Return Due Dates

Staying ahead of your VAT returns and ensuring your returns are accurate and on time can be made significantly more manageable with the right tools and support. Yes, navigating the paperwork and the fine print that comes with VAT can be daunting, but there are solutions designed to help you manage your paperwork and your business perfectly.

One of these solutions is Blue dot. Our VATBox platform helps you gain an in-depth view of all your VAT submissions and transactional data so you can go further than just being on time and accurate – you can increase your VAT recovery potential. VATBox also:

• Offers you insights into VAT trends within your business
• Benchmarks your company against disqualified requests
• Compares invoice data against the most up-to-date regulation per country
• Ensures compliance by providing a fully audit trail
• Reduces the risks of late or inaccurate returns. 

When added to all the benefits of our VAT reclaim calculator, our solutions help you digitally and efficiently manage your VAT returns, optimise your VAT experiences, and keep you on track and penalty-free.