VAT return deadlines and penalties

Most businesses send a VAT return every 3 months. GOV.UK says the online deadline is usually one calendar month and 7 days after the end of the period, and that this is also the deadline for paying, with the money needing to reach HMRC's bank account by then.

If you pay by Direct Debit, GOV.UK says HMRC collects the payment 3 working days after the payment deadline, provided the Direct Debit was set up at least 3 working days before you submitted the return. If you file late, the payment is taken 3 days after you file instead.

Businesses on the Annual Accounting Scheme work to a different timetable: one return due 2 months after the end of the accounting period, with a balancing payment within 2 months of month 12. Our comparison of VAT accounting schemes explains how that scheme works.

Each return you submit late earns one penalty point, and GOV.UK confirms this includes nil or repayment returns. Once your points reach the threshold for your filing frequency you get a £200 penalty, and each further late return while you are at the threshold brings another £200 penalty rather than another point.

If you have not reached the threshold, points expire on their own after 24 months. GOV.UK says that for a deadline that was not the last day of a month, a point expires on the last day of the month, 24 months after the month of the late return.

Once you are at the threshold, points only go when you meet two conditions together. You must complete a period of compliance, submitting every return on time for the length shown in the table, and you must also submit all outstanding returns for the previous 24 months. For a quarterly filer that means a full year of on-time returns with nothing older left outstanding.

Late payment penalties rose on 1 April 2025, and GOV.UK now sets them out like this:

• paid within 15 days of the due date: no late payment penalty
• paid between day 16 and day 30: a first penalty of 3% of the VAT you owe at day 15
• still unpaid after day 30: a first penalty of 3% of what was outstanding at day 15 plus 3% of what was outstanding at day 30, and a second penalty charged at a daily rate of 10% a year on the outstanding balance from day 31

GOV.UK's worked example uses a £15,000 VAT bill. Paid between day 16 and day 30, the first penalty is £450. Before April 2025 the percentages were 2% at day 15, 2% at day 30 and 4% a year from day 31.

The quickest way to limit the cost is to pay what you can early, because the day 15 and day 30 figures are based on what is still outstanding on those days. If you cannot pay in full, contact HMRC promptly: if HMRC agrees a Time to Pay arrangement with you, it can mean lower, or no, late payment penalties.

Interest is separate from penalties. GOV.UK says late payment interest is charged from the first day the payment is overdue until the day it is paid in full, at the Bank of England base rate plus 4%. HMRC's interest rates page gives a late payment rate of 7.75% from 9 January 2026 (rate checked on 6 November 2026). Because it follows the base rate, check the current figure on GOV.UK. This is general information rather than tax advice, and HMRC's guidance is the place to confirm how a penalty has been worked out.

Late returns often come down to records that are not ready in time. Keeping digital records up to date during the quarter, reconciling the bank before the period ends and setting up a Direct Debit all reduce the risk.

If you have only just registered, our guide to how to register for VAT covers the first return, and the VAT registration threshold guide explains how registration starts. The VAT returns service page describes how accountants help with the quarterly cycle. We read every enquiry and, where we can, will put you in touch with a local accountant who can take on the quarterly returns; how it works explains the process.