How to Submit a VAT Return in the UK: A Step-by-Step Guide for Businesses

Every VAT-registered business in the UK is required to submit a VAT return, usually on a quarterly basis. A VAT return reports the VAT you’ve charged customers on sales (output VAT) and the VAT you’ve paid on business expenses (input VAT).

While VAT can feel complicated at first, learning how to submit a VAT return becomes much easier when broken down into clear, manageable steps.

This guide explains how VAT returns work, when they’re due, how to submit them under Making Tax Digital (MTD), and what funding options are available if you’re struggling to pay your VAT bill.

When Are VAT Returns Due?

Most VAT returns are submitted quarterly, although some businesses submit them monthly or annually depending on their VAT scheme.

Your VAT return must:

• Cover your full VAT accounting period
• Report both VAT charged and VAT paid

VAT Return Deadline

The deadline for submitting your VAT return and making payment is:

One calendar month and seven days after the end of your VAT period

Example:
If your VAT period ends on 31 March, your VAT return and payment must reach HMRC by 7 May.

Late submissions or payments can result in penalties. HMRC uses a points-based penalty system, meaning repeated late filings increase fines and charges.

How Easy Is It to Complete a VAT Return?

How straightforward your VAT return is depends on:

• The size of your business
• The volume of transactions
• Whether you trade internationally
• The accounting software you use

For most small businesses with simple finances, completing a VAT return is relatively easy—especially when using digital accounting tools.

You don’t need to be an accountant to submit a VAT return. With reliable software and accurate records, many business owners handle VAT themselves. However, occasional support from a bookkeeper or accountant can help reduce errors and save time.

VAT Return Process: Step by Step

While requirements vary slightly by business, most VAT returns follow the same basic process.

1. Check Your VAT Accounting Period

Confirm the exact dates you’re reporting on. Most businesses submit quarterly, but always check HMRC’s records to avoid errors.

2. Gather Your VAT Records

You’ll need:

• Sales invoices (output VAT)
• Purchase receipts and bills (input VAT)

If you use accounting software, these records are usually stored and categorised automatically.

3. Calculate How Much VAT You Owe (or Can Reclaim)

• Add up VAT charged to customers
• Subtract VAT paid on eligible expenses

The result is your VAT liability—either the amount owed to HMRC or the amount you can reclaim.

4. Complete the VAT Return

VAT returns require nine figures, including:

• Total sales and purchases
• VAT due
• VAT reclaimable

MTD-compatible software will automatically populate these fields, reducing the risk of mistakes.

5. Submit Your VAT Return and Make Payment

Submit your return using:

• HMRC-approved accounting software, or
• The HMRC VAT portal (if exempt from MTD)

If VAT is due, payment must be made by the same deadline. Common payment methods include Direct Debit, online banking, or bank transfer.

How to Submit a VAT Return Under Making Tax Digital (MTD)

Making Tax Digital (MTD) is a government initiative that requires most VAT-registered businesses to:

• Keep digital VAT records
• Submit VAT returns using approved software

Who Must Follow MTD?

MTD applies to businesses with taxable turnover above £90,000.

Approved software options include:

• Xero
• QuickBooks
• FreeAgent

These platforms connect directly to HMRC and submit VAT returns digitally.

If you’re exempt from MTD, you may still submit returns via the HMRC VAT portal, but exemptions must be approved by HMRC.

If it’s your first time filing digitally, allow extra time to authorise your software connection before the deadline.

Making Tax Digital Compliance Explained

If you’re VAT-registered and over the £90,000 threshold, you must:

• Keep digital VAT records
• Use MTD-compatible software
• Submit VAT returns digitally

Even businesses below the threshold may choose to follow MTD voluntarily, as digital tools simplify bookkeeping and reduce errors.

MTD Exemptions

Some businesses may qualify for exemption due to:

• Low turnover
• Age or disability
• Lack of internet access

HMRC reviews exemptions individually.

Correcting Errors in a VAT Return

Mistakes can usually be corrected in your next VAT return if:

• The error is under £10,000, or
• Less than 1% of your quarterly turnover (whichever is lower)

This is known as self-correction.

For larger errors—or if the correction reduces the VAT owed—you must inform HMRC directly, often using a VAT652 form. Always keep clear records of any corrections made.

Pay Your VAT Bill Without Hurting Cash Flow

VAT payments can put pressure on cash flow, especially if customer invoices are unpaid or stock costs are high.

That’s where Clear Business Finance can help.

Flexible Business Finance from Clear Business Finance

With a flexible business loan, you can cover your VAT bill and spread the cost over manageable repayments—without disrupting day-to-day operations.

✔ Borrow from £1,000 to £1 million
✔ Flexible repayment terms
✔ Repay early with no penalties
✔ Fast online application

👉 Learn more or apply today:
https://www.clearbusinessfinance.com/

If your VAT bill is due but your cash is tied up, our funding solutions give you the flexibility to stay compliant and keep your business moving forward.