How to Submit a VAT Return

Every VAT-registered business in the UK has to submit a VAT return, typically once a quarter. In your return, you report the VAT you’ve charged on sales and the VAT you’ve paid on purchases. While it can seem technical at first, understanding how to submit a VAT return is easier once you break it down into clear steps.

This guide explains the full process, from deadlines to software and compliance with Making Tax Digital (MTD), as well as the flexible finance options available if you’re struggling to pay your tax bill.

When are VAT returns due?

VAT returns are usually submitted quarterly, although monthly or annual submissions are also possible depending on your setup. Your return has to cover your full VAT accounting period and report both the VAT you’ve charged and paid.

The deadline for submitting VAT return paperwork is one calendar month and seven days after the end of your VAT period. Payment is due by the same date. For example, if your VAT period ends on 31 March, the return and payment must be with HMRC by 7 May.

Late submissions or payments can lead to penalties and surcharges. HMRC uses a points-based system: if you miss deadlines too often, the penalties increase. 

How easy is it to complete a VAT return?

The complexity of submitting a VAT return depends on how your business operates. But if your accounts are straightforward and you use digital tools, the process is relatively simple. Businesses with higher turnover, complex transactions or international trade may face more work.

Many small business owners worry about getting it wrong, but you don’t need to be an accountant to complete a VAT return. With the right software and some attention to detail, you can handle the process with confidence.

If you’re unsure, even occasional support from a bookkeeper or accountant can help avoid errors.

VAT return process

Again, while different businesses might have unique reporting requirements, there are (generally speaking) a few clear steps to follow when preparing your return.

Check your VAT accounting period

Before you start, confirm which period you’re reporting on. Most returns are quarterly, but make doubly sure the dates match what HMRC expects to see.

Gather your VAT records

You’ll need invoices and receipts for sales (output VAT) and purchases (input VAT). If you use accounting software, these records are usually stored automatically.

Calculate how much VAT you owe or can reclaim

Add up the VAT charged to your customers, then subtract the VAT you’ve paid on eligible business expenses. This gives you your VAT liability – that is, what you owe HMRC or what you can reclaim.

Complete the VAT return

You’ll enter nine figures into the VAT return form, covering totals for sales, purchases, VAT due and VAT reclaimable. Once again, this’ll be easier if you use software, as these fields will auto-populate based on your records.

Submit to HMRC and make payment if needed

Once the return is complete, you submit it through your chosen software or, in some cases, directly via the HMRC portal. If you owe VAT, make the payment by the same deadline. You can usually pay by Direct Debit, bank transfer or online.

How to submit a VAT return

The way you submit your VAT return depends on whether you’re affected by Making Tax Digital (MTD).

MTD is a government initiative requiring most VAT-registered businesses to keep digital records and file returns using compatible software. It’s part of HMRC’s push to make the tax system more efficient and reduce errors.

• If you fall under MTD – which applies to most businesses with taxable turnover above £90,000 – you have to use HMRC-approved accounting software. Options include Xero, QuickBooks and FreeAgent, all of which support digital recordkeeping and filing.
• Alternatively, you can submit via the HMRC online services portal, but only if you’re exempt from MTD or have received specific permission from HMRC to continue using the portal.

If it’s your first time submitting a VAT return online, you’ll need to authorise your software to connect with your HMRC account. Most platforms guide you through this setup, but it’s worth allowing a few extra days before your deadline in case of any delays or issues.

Compliance with Making Tax Digital 

If you’re VAT registered and your turnover is over £90,000, you must follow the government’s Making Tax Digital rules. This means:

• Keeping digital records of VAT transactions.
• Using MTD-compatible software to submit returns.
• Filing returns digitally (manual submissions are no longer allowed for most).

Even if you’re under the threshold, voluntarily following MTD rules can make recordkeeping simpler. Most popular accounting tools are already compatible.

Some businesses are exempt from MTD. These include businesses with a taxable turnover below £90,000, as well as those that can’t use digital tools due to reasons like age, disability or location (for example, no reliable internet access). HMRC approves all exemptions on a case-by-case basis.

Correcting errors in a VAT return

If you realise you’ve made a mistake after submitting, you can often fix it in your next return – provided the error is less than £10,000 or less than 1% of your quarterly turnover (whichever is lower). This is called self correction.

If the error is larger or if the correction would reduce how much you owe HMRC, you’ll need to notify them directly, usually by writing or using a VAT652 form. In either case, keep a clear record of what was corrected and why, in case HMRC requests evidence later.

How iwoca can help

Cash flow can often be tight when VAT is due. While reclaimable VAT can boost your finances later, the upfront payment can put pressure on your working capital – especially if you’re waiting on invoices to be paid.

That’s where our Flexi-Loan comes in. It’s designed to help you bridge these short-term gaps. You can borrow from £1,000 to £1,000,000 with flexible repayment terms. There are no early repayment fees, and you only pay interest for the days you borrow.

If your VAT bill is due and cash is tied up in stock or unpaid invoices, a Flexi-Loan gives you the freedom to meet your tax obligations without disrupting the rest of your operations.

Check your eligibility for an iwoca Flexi-Loan and see how fast, flexible finance can support your business.

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