How to Do a VAT Return in the UK – 2026

A VAT return is the quarterly summary you send to HM Revenue and Customs that shows the VAT you charged on sales and the VAT you paid on purchases. You work out the difference, then either pay HMRC what you owe or reclaim the difference if you paid more than you charged. Most VAT registered businesses send one every three months, fill in nine boxes, and must file it through software that works with Making Tax Digital. The deadline to submit and to pay is one calendar month and 7 days after the end of the period.

This guide walks through the whole process in plain English: what goes in each box, how to submit under Making Tax Digital, when the money is due, and what happens if you are late. If you only need to work out the VAT on a single sale or purchase before you start, our free calculator does that in seconds.

What is a VAT return?

A VAT return is a record of your VAT for one accounting period, which is normally three months long. It reports two things. The first is your output VAT, the VAT you added to your own sales. The second is your input VAT, the VAT you were charged on the things you bought for the business. HMRC wants the difference. If you charged more VAT than you paid, you send the balance to HMRC. If you paid more than you charged, which is common for businesses that are growing or that sell mostly zero rated goods, you reclaim the balance instead.

You have to send a return even if you have nothing to declare. A period with no sales and no purchases is still a return, known as a nil return, and it must reach HMRC by the same deadline as any other.

How to do a VAT return, step by step

1. Keep digital records. Under Making Tax Digital you must record every sale and purchase digitally, using software rather than a paper book or a plain spreadsheet on its own.
2. Add up the VAT you charged. Total the VAT on all your sales for the period. This becomes your output VAT.
3. Add up the VAT you paid. Total the VAT on your business purchases and expenses that you are allowed to reclaim. This becomes your input VAT.
4. Fill in the nine boxes. Your software usually does this for you from the records, but you should understand what each box means so you can check it.
5. Check the figures. Make sure the totals look right and that you have not missed any invoices or claimed VAT you cannot reclaim, such as VAT on business entertainment.
6. Submit through your software. Send the return to HMRC through your Making Tax Digital software before the deadline.
7. Pay HMRC or collect your refund. Pay any VAT you owe so that it clears by the deadline, or wait for HMRC to repay you, usually within ten working days.

The nine boxes of a VAT return explained

Every VAT return has the same nine boxes. Boxes 1 to 5 deal with the VAT itself. Boxes 6 to 9 deal with the values of your sales and purchases before VAT.

A simple worked example

Imagine a small design agency in one quarter. It charged customers £10,000 of VAT on its invoices, and it paid £4,000 of VAT on software, equipment and other costs. The return almost writes itself.

Because the agency charged more than it paid, it owes HMRC £6,000. If the figures were the other way around, with £4,000 charged and £10,000 paid, Box 5 would be a £6,000 refund instead. Working out the VAT on each invoice correctly is what makes the boxes add up, so it pays to get every figure right.

How to submit under Making Tax Digital

Making Tax Digital for VAT applies to all VAT registered businesses, whatever their turnover. You can no longer type your figures into the old HMRC website. Instead you must keep digital records and send the return through compatible software.

There are two common ways to do this. Full accounting software such as the popular cloud packages keeps your records and files the return in one place. If you would rather keep your records in a spreadsheet, you can use bridging software, which is a small tool that reads the nine box figures from your spreadsheet and sends them to HMRC. Either way, the software connects to HMRC and files the return for you once you have checked it.

VAT return deadlines and how to pay

Your deadline to submit and to pay is one calendar month and 7 days after the end of your accounting period. The table below shows the deadlines for the most common quarters.

The payment has to clear the HMRC account by the deadline, not simply be sent on that day, so leave enough time. The speed depends on the method:

• online or telephone banking through Faster Payments usually reaches HMRC the same day or the next day
• CHAPS reaches HMRC the same working day
• Direct Debit is collected automatically, around three working days after the deadline, so it is one of the safest options
• BACS and debit or corporate credit card payments usually take up to three working days

What happens if your VAT return is late?

HMRC uses a points system for late returns. Each return you file late earns one penalty point. When your points reach the threshold for your filing pattern you get a £200 penalty, and a further £200 for every late return after that while you stay at the threshold.

Paying late is charged separately. Since April 2025 the first late payment penalty is 3% of the VAT still owed at day 15, plus another 3% of what is still owed at day 30. From day 31 a second penalty builds up daily at a rate of 10% a year on the outstanding amount. On top of the penalties, HMRC charges late payment interest at the Bank of England base rate plus 4%. The clear message is that filing a nil return on time costs nothing, while filing or paying late adds up quickly.

Frequently asked questions