VAT Deadlines & Penalties: Key Dates & Information for Your Company

Get the latest information on VAT return periods and more.

Updated: May 20, 2024
Matt Crabtree

Written By

Matt Crabtree

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As a UK business owner, you'll know you must make VAT payments to HMRC. These payments align with your VAT return, which you can calculate by deducting the input VAT from the output VAT. However, submitting the VAT returns on time is a separate issue, for which you'll need to know the VAT deadlines.

You may also be concerned about the consequences of failing to submit VAT returns on time. If you are curious, this article will help. 

Our financial professionals will share the amount of time you have to complete VAT returns after the accounting period, an example deadline date you'll need for your diary, the penalties you may face, and the exemptions to penalty points. Check this article for the crucial details.

When Should You Complete a VAT Return? VAT Return Periods

Generally speaking, a company will file its VAT returns in the period between a single calendar month plus seven days following the accounting period.

You'll have a deadline to consider when completing each VAT return. So, to complete the return on time, ensure you submit it online after the VAT accounting period is over and leave enough time to complete it.

You will find that this deadline coincides with the time you must pay HMRC. As a VAT-registered business, you should keep a VAT account to make completing the VAT tax return easier.

Key VAT Return Deadline Dates to Consider: Example Dates

Let's consider an example of a VAT return deadline date to understand when the return is due.

If your VAT quarter ends on 30 September 2024, you must submit the VAT return by 7 November 2024, along with the VAT owed. 

This deadline is one month and seven days after the end of the accounting period for that specific quarter. Ensure you leave sufficient time between the deadline and payment so that HRMC receives the return and the payment.

VAT Return Deadline for Annual Accounting Scheme

Now, if your company reports the VAT return using the VAT Annual Accounting Scheme, you may have different VAT return deadlines.

As stated by the government website, 12 months make up your VAT accounting period. 

In this case, your payment will be issued once per year. Regarding the specific deadline, you must submit the VAT return two months following the end of the accounting period. 

What Are Late Penalty Points?

Under the new system, implemented in January 2023, there are unique consequences if you submit late VAT returns.

In terms of VAT accounting periods starting from 1 January 2023 or afterwards, late payment penalty points are points you receive if you fail to submit your VAT return on time. 

You can earn late penalty points even if you have nothing to declare (known as a nil VAT return) and will accumulate points even in this case. 

Several penalty point threshold exists. If you reach or exceed this threshold after the VAT accounting periods, you may receive a £200 financial penalty.

When we look at the penalty threshold, we can see that it is calculated in line with the VAT return submission frequency. For annual VAT returns, you'll have to pay a penalty when you reach the penalty point threshold of two points. 

For quarterly VAT returns, you'll have to pay a penalty when you reach the penalty points threshold of four points. For monthly VAT returns, you'll have to pay a penalty when you reach the threshold of five points. 

We can look at an example of late filing points to understand how they work. If your business submits three VAT returns late, you'll already receive three penalty points for each late submission. Upon submitting the final return late, you'll receive a fourth penalty point and, with the penalty points built up, a fine of £200.

VAT Penalties: How Does the Late Payment Penalty Work?

As well as the late payment penalties, you will also notice that daily penalties can apply. The later you submit your return, the higher the late payment penalty will be. 

If you make VAT payments up to 15 days after the deadline, you'll not get a penalty. If you're 16 days late, you'll get a penalty. For example, if you fail to submit your VAT return within 17 days after the deadline, you will have to pay 2% of the owed VAT that was recorded on day 15. 

If you make VAT payments 31 days late, you'll receive a 2% penalty and a further 2% penalty calculated in line with the amount owed on your VAT bill on the 31st day. This total brings you to 4%.

Penalties and interest both apply in this case. The interest will apply to your overdue tax in line with the base rate of the Bank of England, and a further 2.5% will be added.

Taking Over a Business and Penalty Points

You may be concerned about taking over a business and want to know if you will also take the penalty points. In this case, the penalty points will not transfer to your VAT registration number. This outcome is the case even if you inherit the VAT registration number from the previous owner.

Exceptions to VAT Penalties: When Late VAT Returns Are Penalty-Free

There are a couple of circumstances in which there are exceptions to VAT penalties.

You'll not receive a penalty on your first VAT return if you are newly VAT registered. You'll also not earn any penalties related to your final VAT return if you cancel your VAT registration.

If you're filing one-off returns that reflect a switch from monthly returns to yearly or quarterly returns, this is a case in which HMRC will not give a penalty point to your company.

VAT Deadlines & Penalties: Key Points to Remember

Keeping VAT deadlines in your diary is important to avoid financial penalties and interest costs when you pay VAT and submit the returns. To ensure you receive penalty points, leave sufficient time to submit the VAT returns so HMRC receives them on time

With this approach, and keeping a VAT account, you can handle VAT returns effortlessly.

Related Guides:

FAQs

Will VAT Returns be Categorised in the Default Surcharge Liability Period?

How Can I Remove Penalty Points?

What Is the Compliance Period or Timeframe?

What Is Late Payment Interest?

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