VAT Return Deadlines and Penalties: Stay Compliant

VAT return deadlines catch out more small businesses than almost any other tax date, partly because they come round four times a year and partly because the penalty rules changed in 2023 and again in 2025. Miss one and you start collecting penalty points; pay late and the charges grow every day. This guide sets out the VAT return deadlines that apply to most businesses, how the penalty system works now, and the simple habits that keep you out of trouble.

The standard VAT return deadline

For most VAT-registered businesses, the rule is simple: your VAT return and your payment are both due one calendar month and seven days after the end of your VAT period.

So for quarterly returns:

• a period ending 31 March is due by 7 May
• a period ending 30 June is due by 7 August
• a period ending 30 September is due by 7 November
• a period ending 31 December is due by 7 February

Your own VAT periods are set when you register, so your quarters might end in January, April, July and October instead. Check your business tax account or your Making Tax Digital software for your exact VAT return deadlines.

Paying by direct debit

If you pay by direct debit, HMRC collects the payment three working days after the deadline, so you do not have to pay early. You must still file the return on time, and the direct debit must be set up at least three working days before you submit your return.

Paying by other methods

Payments by bank transfer, debit card or corporate credit card must reach HMRC by the deadline. Faster Payments usually arrive the same or next day, but CHAPS and Bacs can take longer, so do not leave it to the last day.

Different VAT return deadlines for some schemes

A few schemes have their own timetable:

• Annual Accounting Scheme: one return a year, due two months after the end of your accounting period, with interim payments through the year.
• Payments on account: businesses with a VAT liability of more than £2.3 million a year make monthly payments on account, with different dates.
• Monthly returns: some businesses, often those that usually receive repayments, choose monthly returns. The one month and seven days rule still applies to each month.

Late submission: the penalty points system

For VAT periods starting on or after 1 January 2023, HMRC replaced the old default surcharge with a points-based system. Each return you file late earns one penalty point. You get a £200 penalty only when you reach a points threshold, which depends on how often you file:

• Annual returns: threshold of 2 points
• Quarterly returns: threshold of 4 points
• Monthly returns: threshold of 5 points

Once you reach the threshold, every further late return brings another £200 penalty. Points apply to nil returns and repayment returns too: missing VAT return deadlines when you have nothing to pay still counts.

How to get back to zero points

Below the threshold, each point expires after 24 months. Once you are at the threshold, the points only reset when you have:

1. met a period of compliance, which is 12 months of on-time returns for quarterly filers, and
2. filed every return due in the previous 24 months, even late ones.

That means one bad year can leave you at the threshold for a long time. The best protection is never letting the first point land.

Late payment penalties since April 2025

Late payment is now charged separately from late filing, and the rates went up from April 2025. If your VAT is not paid in full by the deadline:

• Up to 15 days late: no penalty, as long as you pay in full or agree a payment plan within 15 days.
• 16 to 30 days late: a first penalty of 3% of the VAT still owed at day 15.
• 31 days or more late: the first penalty becomes 3% of what was owed at day 15 plus 3% of what was still owed at day 30, and a second penalty starts, charged daily at an annual rate of 10% on the outstanding amount until it is paid.

Late payment interest is charged on top, from the day after the deadline, at the Bank of England base rate plus 4%. On a £15,000 VAT bill paid 51 days late, the penalties alone come to around £900 plus the daily charge, before interest.

What if you cannot pay on time?

If you know you will struggle to pay by your VAT return deadline, contact HMRC before the deadline. Many businesses can set up a Time to Pay arrangement online if they owe up to a set amount and meet the conditions. Agreeing a plan within the first 15 days stops the first late payment penalty from building, though interest still applies.

What you should not do is skip the return because you cannot pay. Filing on time keeps you clear of penalty points, and the payment problem can be handled separately.

What happens if you never file?

If a VAT return is not filed at all, HMRC will not simply wait. It can issue a VAT assessment, an estimate of the VAT it thinks you owe, and expects you to pay it. The estimate is often higher than the real figure, and it stands until you file the actual return. Penalty points and late payment penalties keep running in the meantime.

Repeated failures can lead to HMRC asking for a security deposit before you can keep trading, and for limited companies, persistent non-compliance can draw attention to the directors as well as the business. Filing late is always better than not filing.

Why businesses miss VAT return deadlines

In practice, VAT return deadlines are rarely missed because someone forgot VAT existed. The usual causes are more practical:

• Records left until the last week. A quarter's receipts and invoices take far longer to sort than expected, especially with missing paperwork.
• Software not connected. MTD software needs to be authorised with HMRC, and that link has to be renewed from time to time. Discovering the connection has lapsed on deadline day is common.
• Bank feeds out of date. If the software has not pulled in transactions, the return cannot be checked properly.
• Cash not set aside. The return gets delayed because the business knows it cannot pay, which turns one problem into two.
• Changes in staff or accountant. Responsibility for the return falls between two people and nobody files it.

Each of these is easy to fix once you know it is a risk, and most come down to doing a little every month instead of everything at the end of the quarter.

Reasonable excuse and appeals

If something outside your control stopped you meeting your VAT return deadlines, such as a serious illness, a bereavement or an HMRC system failure, you can ask HMRC to remove the point or penalty for reasonable excuse. Lack of money, relying on someone else, or not knowing the rules are not usually accepted. Appeals must normally be made within 30 days of the penalty decision.

Making Tax Digital and your deadlines

Every VAT-registered business must keep digital records and file through software that works with Making Tax Digital. Most MTD software shows your obligations and VAT return deadlines on its dashboard, which is one of the easiest ways to keep track. You cannot file through the old online form, so make sure your software is connected well before the deadline.

How to never miss VAT return deadlines

• Diarise all four quarters at once, with a reminder two weeks before each deadline.
• Keep records up to date monthly, so the return is a quick check rather than a rescue job.
• Set aside the VAT you charge in a separate account, so the money is there when the bill arrives.
• Pay by direct debit to gain three working days and remove the risk of a missed transfer.
• File early when you can. Submitting a week before the deadline leaves time to fix any software or bank problem.
• Use an accountant who tracks your obligations and files for you.

For more on keeping the process light all year, read our guide on making VAT returns easy.

VAT return deadlines: key points

• Returns and payments are due one calendar month and seven days after each VAT period.
• Late returns earn points; a £200 penalty applies at 2, 4 or 5 points depending on how often you file.
• Late payment penalties start after 15 days at 3%, with a further 3% at day 30 and a daily 10% annual rate after that.
• Interest is charged on late VAT at base rate plus 4%.
• Contact HMRC early if you cannot pay, and always file on time regardless.

HMRC explains the rules in full on GOV.UK: penalty points for late VAT returns and how late payment penalties work.

Let us file your VAT returns on time

Our team tracks your VAT return deadlines, prepares every return from your records, checks the figures and files through Making Tax Digital before the due date, so penalty points never get a chance to build up. See our VAT return service for plans and prices.