VAT deadlines and penalties
VAT DEADLINES AND PENALTIES
VAT Filing Deadlines
VAT Deadlines and Penalties - The deadline for submitting your VAT return online is usually one calendar month and 7 days after the end of a VAT accounting period. To help you keep on top of the deadlines, you can go to your online account and tick to receive email reminders of your VAT return being due.
VAT Payment Deadlines
All VAT payments must now be made electronically.
Direct debit
Once you are registered to file your returns on-line, you can then also register to pay by direct debit. This method normally gives you an extra three days before any VAT payment due is taken from your bank account and the money will be taken from your account around the 10th or 12th of the month.
To pay by direct debit, log in on-line to your VAT account (once you have received your user ID and password) and you will see an option to set up payments by direct debit.
Please note that you need to do this well in advance of the return being due to enable HMRC to set up the direct debit in time. We would recommend doing this at least two weeks before filing your return on-line.
Please also note that if you submit your VAT return after the due date, then HMRC will collect the direct debit payment on the third working day after the return is received, and this will give rise to a default surcharge issue.
Other payment methods
To see when you will need to make your payment using other electronic payment methods go to https://www.gov.uk/vat-payment-deadlines.
Electronic payments other than direct debits must be with HMRC one calendar month and 7 days after the end of a VAT accounting period.
Depending on the payment method, you will normally need to make payment by the 5th of the month to enable the payment to reach HMRC by 7th of the month.
Surcharges and Penalties
Surcharges
Understanding VAT Deadlines and Penalties
A late VAT Return or payment is known as a ‘default’.
If you’re turning over more than £150,000 then on the first occasion that you are late submitting a VAT return, or you pay the tax late on a return, then a default surcharge liability notice is generated. This means that VAT returns and payments need to be submitted on time for the next 12 months otherwise an escalating penalty takes effect, based on the unpaid tax liability by the due date.
If you’re turning over less than £150,000 then on the first occasion you are late you’ll get a polite letter reminding you that you are late. If you are late again within 12 months then you’ll get a default surcharge liability notice and then the escalating penalties.
HM Revenue and Customs (HMRC) will write explaining any surcharges and what happens if you default again. Surcharges are a percentage of the tax paid late. HMRC estimate this if they don’t have your return - this is known as an ‘assessment’.
| Default | Surcharge if turnover is less than £150,000 | Surcharge period |
| 1st | No surcharge but if you default within 12 months you enter a surcharge period | None, but if you miss another VAT deadline within 12 months of the issue of a help letter you will formally enter the surcharge system. |
| 2nd | No surcharge but you enter a surcharge period | 12 months |
| 3rd | 2% (or no surcharge if it’s less than £400) | 12 months from the date of the most recent default |
| 4th | 5% (or no surcharge if it’s less than £400) | 12 months from the date of the most recent default |
| 5th | 10% or £30 (whichever is more) | 12 months from the date of the most recent default |
| 6th or more | 15% or £30 (whichever is more) | 12 months from the date of the most recent default |
| Default | Surcharge if turnover is £150,000 or more | Surcharge period |
| 1st | No surcharge but you enter a surcharge period | 12 months |
| 2nd | 2% (or no surcharge if it’s less than £400) | 12 months from the date of the most recent default |
| 3rd | 5% (or no surcharge if it’s less than £400) | 12 months from the date of the most recent default |
| 4th | 10% or £30 (whichever is more) | 12 months from the date of the most recent default |
| 5th | 15% or £30 (whichever is more) | 12 months from the date of the most recent default |
| 6th or more | 15% or £30 (whichever is more) | 12 months from the date of the most recent default |
There’s no surcharge if you submit a late VAT Return and you pay the VAT on time, you have no tax to pay or you’re due a VAT repayment.
Penalties
HMRC can charge you a penalty (between 15% and 100% of the unpaid amount owed) if your VAT Return is inaccurate.
You can download a copy of HMRC’s penalty document at
You can be charged a penalty of up to £400 if you submit a paper VAT Return, unless HMRC have told you you’re exempt.
If you'd like any other help on what you can and can't claim for business, feel free to get in touch.