VAT Returns in 2026: Deadlines, Boxes 1 to 9, Paying HMRC and Penalties

Once you're registered for VAT, the VAT return becomes one of the fixed points in your business calendar. Every quarter (for most businesses) you tell HMRC how much VAT you charged, how much you can reclaim, and pay or receive the difference. This guide is for UK owners and bookkeepers filing their own returns in 2026. It covers Making Tax Digital, the deadline rule, what goes in each of the nine boxes, how to pay, and the points-based penalty system — with a full worked return in pounds.

Quick answer

A VAT return reports the VAT you charged on sales (output tax) and the VAT you paid on business purchases (input tax) for a VAT period, usually 3 months. It must be filed through Making Tax Digital software and is due, with payment, 1 calendar month and 7 days after the period ends. Box 5 is what you pay or reclaim.

• Quarter ending 30 September → return and payment due 7 November

• All VAT-registered businesses must keep digital records and file with MTD-compatible software

• Late returns earn penalty points; at 4 points (quarterly) you pay £200

• Late payment: interest from day 1, then penalties from day 16

• File a return even if there's nothing to pay

What a VAT return is and who has to file one

Every business registered for VAT must submit a VAT return for each VAT period, whether or not it made any sales. That applies to businesses that registered because their taxable turnover went over £90,000 and to those that registered voluntarily. If you haven't registered yet, start with our guide to VAT registration.

The return is a summary, not a list of invoices. You report totals: the VAT due on your sales, the VAT you can reclaim on purchases, and the net value of your sales and purchases. HMRC uses the figures to work out what you owe and to spot returns that look out of line with similar businesses.

Most businesses file quarterly. Your VAT periods ("stagger") are set when you register and appear in your VAT online account and on your registration certificate. You can ask to change them — for example, to line them up with your financial year end. Businesses that usually get repayments, such as exporters, often choose monthly returns to get their money back faster. Small businesses can join the Annual Accounting Scheme if their estimated taxable turnover is up to £1.35 million, making advance payments during the year and filing one return.

If you use the VAT Flat Rate Scheme, you still file a return, but box 1 shows your flat-rate percentage of VAT-inclusive turnover and you generally can't reclaim input tax, except on certain capital assets.

Making Tax Digital for VAT

All VAT-registered businesses must now follow Making Tax Digital for VAT. That has two parts.

Digital records. You must keep certain records in functional compatible software: your business name, address and VAT number, any VAT schemes you use, and for each sale and purchase the date, value and VAT rate. You also keep summary data for each return. You still need to keep paper invoices and receipts where you have them.

Digital links. Where data moves between programs — say from a sales spreadsheet into bridging software — it must be transferred digitally, by an API, a CSV import or linked cells. HMRC's notice says retyping figures by hand isn't acceptable, and copy-and-paste doesn't count as a digital link.

Are you MTD-ready for VAT?

0/5

• Software that is on HMRC's list of MTD-compatible products (or bridging software for spreadsheets)
• Every sale and purchase recorded digitally with date, net value and VAT rate
• Digital links between any spreadsheets and the filing software — no retyping
• Software authorised with HMRC using your HMRC sign-in details
• Paper invoices and receipts kept as well, where you have them

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You can use full accounting software or keep spreadsheets and use bridging software to submit. HMRC lists recognised products on GOV.UK, including some free options for businesses with simple affairs. You can't usually file through the old HMRC online form any more.

HMRC can exempt you if it's not reasonably practical to use digital tools because of age, disability or remoteness, if you're subject to an insolvency procedure, or if you belong to a religious society whose beliefs are incompatible with electronic communications. Being unfamiliar with software or not wanting to pay for it doesn't qualify. You must apply and wait for HMRC's decision before you stop filing digitally.

VAT return deadlines

The standard deadline is 1 calendar month and 7 days after the end of your VAT period. Payment has to reach HMRC by the same date. HMRC is strict about this: there's no extra time for weekends or bank holidays, so a deadline that falls on a Sunday is still the deadline.

Quarterly VAT deadlines (calendar-quarter stagger)

31 March quarter end

Return and payment due 7 May

30 June quarter end

Return and payment due 7 August

30 September quarter end

Return and payment due 7 November

31 December quarter end

Return and payment due 7 February

A few businesses have different dates. If you're on the Annual Accounting Scheme, your annual return is due two months after the end of your accounting year, with interim payments during the year. Very large businesses make monthly payments on account. Your VAT online account always shows your actual deadlines, and you can set up email reminders.

Your first return after registering, your final return after deregistering, and one-off returns covering a non-standard period don't earn penalty points if they're late. But late payment still costs you interest.

The VAT return boxes 1 to 9 explained

HMRC's VAT Notice 700/12 sets out what goes in each box. Your software fills most of them from your records, but you need to know what they mean to check the figures before you submit.

Box 1 is the VAT you charged. It also includes VAT you account for yourself under the reverse charge — for example on construction services within the CIS reverse charge, or on services bought from overseas suppliers — and import VAT if you use postponed VAT accounting.

Box 4 is the VAT you can reclaim, as long as you hold a valid VAT invoice or import evidence and the purchase was for the business. Reverse-charge VAT and postponed import VAT normally appear in both box 1 and box 4, so they net off for a fully taxable business. You can't reclaim VAT on business entertainment of clients or on things used privately.

Box 6 is net sales — all of them. Include zero-rated sales (such as most food or children's clothes), exempt sales (such as insurance or most residential rents) and exports. Box 7 is net purchases and other inputs, including exempt and zero-rated purchases, imports and reverse-charge services. Leave out wages and salaries, PAYE and National Insurance, loans, dividends, gifts of money, and VAT itself.

Boxes 8 and 9 are only for businesses moving goods between Northern Ireland and the EU. If that's not you, they'll be zero.

Worked VAT return: a joinery company

Northbrook Joinery Ltd files quarterly. Its quarter runs from 1 July to 30 September, so the return and payment are due by 7 November. In the quarter it:

• invoiced £48,000 plus VAT at 20% for fitted kitchens (VAT £9,600)
• invoiced £6,000 for joinery on a new-build house, which is zero-rated
• issued a £1,000 plus VAT credit note to a customer for a cancelled job (VAT £200)
• bought timber for £18,000 plus VAT (VAT £3,600)
• bought a van for £24,000 plus VAT (VAT £4,800) — vans used for the business can have their VAT reclaimed
• bought fuel for £1,500 plus VAT (VAT £300)
• paid business insurance of £600, which is exempt from VAT
• paid wages of £15,000

Northbrook Joinery's VAT return, quarter to 30 September

Box	Figure	How it's worked out
1	£9,400	£9,600 VAT on sales − £200 VAT on the credit note
2	£0	No goods from the EU into Northern Ireland
3	£9,400	Box 1 + box 2
4	£8,700	£3,600 timber + £4,800 van + £300 fuel
5	£700	£9,400 − £8,700 — payable to HMRC
6	£53,000	£48,000 + £6,000 zero-rated − £1,000 credit note
7	£44,100	£18,000 + £24,000 + £1,500 + £600 insurance; wages excluded
8	£0	—
9	£0	—

1

Figure

£9,400

How it's worked out

£9,600 VAT on sales − £200 VAT on the credit note

2

Figure

£0

How it's worked out

No goods from the EU into Northern Ireland

3

Figure

£9,400

How it's worked out

Box 1 + box 2

4

Figure

£8,700

How it's worked out

£3,600 timber + £4,800 van + £300 fuel

5

Figure

£700

How it's worked out

£9,400 − £8,700 — payable to HMRC

6

Figure

£53,000

How it's worked out

£48,000 + £6,000 zero-rated − £1,000 credit note

7

Figure

£44,100

How it's worked out

£18,000 + £24,000 + £1,500 + £600 insurance; wages excluded

8

Figure

£0

How it's worked out

—

9

Figure

£0

How it's worked out

—

The van has a big effect. Without it, box 4 would be £3,900 and the company would owe £5,500. Capital purchases are a common reason returns swing between payment and repayment, and HMRC may check a sudden repayment claim before paying it, so keep the invoice to hand. If you're working out VAT on individual invoices, the VAT calculator adds or removes 20% in one step.

Notice that the zero-rated new-build work goes in box 6 even though it carries no VAT. The insurance goes in box 7 for the same reason. Box 6 and box 7 give HMRC a picture of your turnover and costs; leaving out non-VAT items makes the return look odd and can prompt questions.

How to submit your VAT return

Filing usually takes five steps:

1. Reconcile your records. Match sales and purchase records to your bank statements for the period, and make sure every invoice is dated in the right period.
2. Check the VAT on each transaction. Confirm the rate on each sale and that you hold a valid VAT invoice for everything you're reclaiming. Remove blocked items such as client entertainment.
3. Review the draft return. Your software calculates boxes 1 to 9. Compare them with last quarter and the same quarter last year — big swings deserve a second look.
4. Submit through the software. Authorise the software with HMRC once, then submit. Keep the on-screen confirmation.
5. Pay, or wait for the repayment. Pay by the deadline using your 9-digit VAT number as the reference. Repayments go to the bank account held in your VAT online account.

If you use an accountant or bookkeeper, they can file for you as your agent, but you're still responsible for the figures and the deadline. Agree the date by which they need your records — usually two to three weeks before the deadline.

How to pay your VAT bill

Payment must reach HMRC by the deadline, so the method matters.

Direct Debit is the safest choice for most businesses. Set it up in your VAT online account at least 3 working days before you submit the return. HMRC then collects the payment 3 working days after the deadline. If you file late, it collects 3 calendar days after you submit.

For bank transfers, HMRC's VAT account is sort code 08 32 00, account number 11963155, account name HMRC VAT. Use your 9-digit VAT registration number as the reference, with no spaces. A wrong reference is a common reason a payment is "lost" and penalties are charged.

Penalty points for late VAT returns

Since 2023, late VAT returns are dealt with by a points system rather than the old default surcharge. You get one point for every late return, including nil and repayment returns. When your points reach the threshold for your filing frequency, you pay a £200 penalty, and another £200 for each later late return while you're at the threshold.

Penalty point thresholds and how to reset them

How often you file	Points threshold	Period of compliance to reset	Returns to file on time
Annually	2 points	24 months	2
Quarterly	4 points	12 months	4
Monthly	5 points	6 months	6

Annually

Points threshold

2 points

Period of compliance to reset

24 months

Returns to file on time

2

Quarterly

Points threshold

4 points

Period of compliance to reset

12 months

Returns to file on time

4

Monthly

Points threshold

5 points

Period of compliance to reset

6 months

Returns to file on time

6

If you're below the threshold, each point expires automatically after about 24 months. If you've reached it, all your points are wiped only when you've filed every return on time for the full period of compliance and submitted every outstanding return from the previous 24 months.

Example: a quarterly filer has 3 points. Its next return is late, taking it to 4 points and triggering a £200 penalty. It files the next return on time — no penalty, but the points stay at 4. Then it's late again: another £200. To clear the points, it must file four returns on time in a row (12 months) with nothing outstanding.

Late payment penalties and interest

Paying late is treated separately from filing late, and it can cost more.

• Late payment interest runs from the first day the VAT is overdue until it's paid, at Bank of England base rate plus 4% — currently 7.75% a year.
• Days 1 to 15: no penalty, only interest.
• Days 16 to 30: a first penalty of 3% of the VAT still owed at day 15.
• Day 31 onwards: the first penalty becomes 3% of what was owed at day 15 plus 3% of what was still owed at day 30. A second penalty also starts, charged daily at 10% a year on the outstanding balance until you pay.

Worked example: a business owes £6,000 and pays it 40 days late.

• First penalty: 3% × £6,000 at day 15 (£180) + 3% × £6,000 at day 30 (£180) = £360
• Second penalty: £6,000 × 10% × 10 days ÷ 365 = £16.44
• Interest: £6,000 × 7.75% × 40 days ÷ 365 = £50.96
• Total extra cost: £427.40

If it had paid within 15 days, it would have paid only interest — around £19 for 15 days. If you can't pay in full, contact HMRC before day 15 to agree a Time to Pay arrangement. An agreed plan can reduce or stop late payment penalties, as long as you keep to it. Interest still applies.

Correcting mistakes on a VAT return

If you find an error in an earlier return, you may be able to correct it on your next one by adjusting box 1 or box 4. That's allowed for errors from the previous four years if the net value of all the errors is £10,000 or less, or up to £50,000 if it isn't more than 1% of the box 6 figure on the return you're correcting it on. Bigger errors, or deliberate ones, must be reported separately to HMRC, usually on form VAT652 or through your online account.

Keep a note of what you corrected and why. If HMRC finds an error first, penalties for careless or deliberate inaccuracies can apply on top of the tax, so it pays to correct mistakes yourself as soon as you spot them.

Common VAT return mistakes

• Claiming VAT without a valid invoice. A card receipt that doesn't show the supplier's VAT number won't support a claim. You can check a supplier's number with our VAT number lookup guide.
• Missing the payment deadline because of Bacs. A Bacs transfer sent on the due date arrives too late.
• Forgetting credit notes. Credit notes you issue reduce boxes 1 and 6; credit notes you receive reduce boxes 4 and 7.
• Leaving out zero-rated and exempt sales from box 6.
• Including wages in box 7.
• Reclaiming VAT on cars. You usually can't reclaim VAT on buying a car unless it's used only for business, such as a driving school car. Vans are different.
• Filing nothing in a quiet quarter. A late nil return still earns a point.

The Autumn Budget on 28 October 2026 could change VAT rates, thresholds or penalty rules. The return process itself rarely changes mid-year, but check your software's update notes after the Budget.

Official HMRC and GOV.UK links

• Submit your VAT ReturnDeadlines and how to file
• VAT Notice 700/12: filling in your returnBox-by-box guidance
• VAT Notice 700/22: Making Tax DigitalDigital records and exemptions
• Pay your VAT billDirect Debit and other methods
• Penalty points for late returnsThresholds and £200 penalties
• Late payment penaltiesRates and worked examples

What to do next

Put your next four VAT deadlines in your diary, and set up a Direct Debit at least three working days before your next submission. Before each return, reconcile your records to the bank and run through the box checks above. Use the VAT calculator for invoice-level sums, and the invoice generator to make sure your sales invoices show everything HMRC expects. If you're new to VAT, read our guides to VAT registration and Making Tax Digital.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

When is my VAT return due?

Most VAT returns are due 1 calendar month and 7 days after the end of the VAT period, and the payment must reach HMRC by the same date. For a quarter ending 30 September, both the return and the payment are due by 7 November. The deadline doesn't move for weekends or bank holidays, so pay early if you're not using Faster Payments, card or Direct Debit.

Can I still submit a VAT return through my HMRC online account?

Usually not. Under Making Tax Digital, all VAT-registered businesses must keep digital records and submit returns through MTD-compatible software or bridging software. Only businesses HMRC has exempted — for example because of age, disability, remoteness, insolvency or religious beliefs — can file another way. You must apply for an exemption and get HMRC's decision before you stop using software.

What is the penalty for a late VAT return?

Each late return earns one penalty point. When you reach the threshold — 4 points for quarterly filers, 5 points for monthly and 2 points for annual — you pay a £200 penalty, and another £200 for each further late return. Points reset after a period of compliance, which for quarterly filers is 12 months of on-time returns.

What happens if I pay my VAT late?

HMRC charges late payment interest from the first day the VAT is overdue, at Bank of England base rate plus 4%. If it's still unpaid after 15 days, you also pay a first penalty of 3% of the amount owed at day 15, plus a further 3% of the amount still owed at day 30. From day 31, a second penalty accrues daily at 10% a year.

What goes in box 6 of a VAT return?

Box 6 is the total value of your sales and other outputs, excluding VAT. It includes standard-rated, reduced-rate, zero-rated and exempt sales, exports, and any Northern Ireland goods sales to the EU shown in box 8. Deduct credit notes you've issued. Don't include the VAT itself, and don't leave out zero-rated or exempt sales just because they carry no VAT.

Do I have to file a VAT return if I made no sales?

Yes. Every VAT-registered business must submit a return for each period, even when there's nothing to pay or reclaim. A late nil return earns a penalty point in the same way as any other return. If you've stopped trading or expect to stay below the deregistration threshold of £88,000, think about cancelling your registration.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 9 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Submit your VAT Return — GOV.UK · accessed 9 October 2026
2. 2.How to fill in and submit your VAT Return (VAT Notice 700/12) — HMRC (GOV.UK) · accessed 9 October 2026
3. 3.VAT Notice 700/22: Making Tax Digital for VAT — HMRC (GOV.UK) · accessed 9 October 2026
4. 4.Penalty points and penalties if you submit your VAT Return late — HMRC (GOV.UK) · accessed 9 October 2026
5. 5.Remove penalty points you've received after submitting your VAT Return late — HMRC (GOV.UK) · accessed 9 October 2026
6. 6.How late payment penalties work if you pay VAT late — HMRC (GOV.UK) · accessed 9 October 2026
7. 7.Pay your VAT bill: Direct Debit — GOV.UK · accessed 9 October 2026
8. 8.Pay your VAT bill: other payment methods — GOV.UK · accessed 9 October 2026
9. 9.HMRC interest rates for late and early payments — HMRC (GOV.UK) · accessed 9 October 2026