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Know All About VAT Payment Deadline in the UK

Everything you need to know about VAT payment and deadlines

VAT is a fact of life for UK businesses, but managing it doesn’t have to be a headache. The various deadlines and penalties might seem daunting, but with the right approach, VAT is completely manageable!

VAT returns are usually due one month and seven days after the accounting period ends. Payment deadlines vary by quarterly, monthly, or annual schemes. Late payments can result in penalties, so check your online VAT account for specific deadlines.

In this blog, we will discuss everything you need to know about VAT deadlines, returns and how to pay VAT in the UK.

At Unicorn Accountants, we’re here to help you with VAT. However, we believe that having a good working knowledge of how it works will empower you to manage your business finances more effectively! Read on for our helpful guide, or reach out to us today for advice.

What is the VAT Payment Deadline?

The VAT Payment Deadline in the UK refers to the latest date by which a UK business must submit its VAT return and pay any VAT owed to HMRC. For most businesses, this is one month and seven days after the end of their VAT accounting period.

Missing this deadline can result in penalties and interest charges. Businesses using Direct Debit get a few extra days for payment collection. Different VAT schemes, such as the Annual Accounting Scheme, may have alternative deadlines.

Frequency of VAT Returns

Your VAT return submission frequency depends on your business circumstances:

  • Quarterly basis: Most small to medium-sized businesses submit returns every three months

  • Monthly basis: Available for businesses receiving regular VAT refunds

  • Annual accounting scheme: Suitable for businesses with annual turnover below £1.35 million

The quarterly VAT period is not the same as the calendar quarter. The timing of your VAT period depends on when you first became a VAT-registered business. Your online account will state your specific submission calendar.

When is the deadline?

Now that we have discussed the various frequencies for filing VAT returns, here are some points to note:

  • All relevant information regarding your returns and the deadline for your business can be found in your HMRC online account.

  • The deadline for submitting and paying VAT returns falls one calendar month and seven days after the end of your VAT period. That means if your period ends on 30th April, the tax will be due on 7th June.

  • Note that those businesses which are part of the Payments on Account scheme have different deadlines.

  • If the due date falls on a Sunday, the VAT deadline is postponed to the next working day.

  • During your accounting period, you must pay your VAT bill in advance (either monthly or quarterly) and then make a final payment when you file your VAT return.

Here is a breakdown of the VAT period deadlines

Frequency

Deadline

Monthly

At the end of months 4, 5, 6, 7, 8, 9, 10, 11 and 12

Quarterly

At the end of months 4, 7 and 10

Final Annual

Within 2 months of month 12

 

Quarterly VAT returns

If your business sends in VAT returns quarterly, it's important to keep a record of both the VAT you charge your customers (output VAT) and the VAT you pay on your business expenses (input VAT). To avoid penalties, HMRC needs to receive your VAT payment by the deadline. Many businesses find quarterly VAT returns a good way to manage their cash flow.

Monthly VAT returns

Some businesses opt for monthly returns to better manage payments and potential VAT refund timing. While this means more frequent submissions, it can provide better visibility of your VAT obligations and help prevent large tax bills from accumulating.

Annual Accounting Scheme

The annual accounting scheme makes VAT simpler by only requiring one VAT return a year. You'll make payments in advance based on what you expect your estimated yearly VAT to be, which helps spread the cost. Then, when you submit your annual return, you'll pay any remaining balance or get a refund if you've overpaid.

Where can I find out my VAT payment deadline?

Your HMRC online account is your go-to place for all the details on VAT deadlines and penalties. It's also where you can manage many VAT-related tasks, including:

  • Regular monitoring of your tax position

  • Noting any bank holiday impacts on the deadline

  • Setting up electronic payments in advance

  • Making payments on a one-off or regular basis

  • Understanding late VAT return implications

     

How much VAT do I need to pay by each deadline

Here is a basic guide to working out how much VAT you owe:

  • For monthly payments, the payment is 10% of your estimated VAT bill

  • For quarterly payments, the payment is 25% of your estimated VAT bill
    Note: HMRC will send you a letter explaining your instalment amounts and when they're due.

  • The final payment you make, also known as the 'balancing payment', is the difference between your advance VAT paid and the actual VAT bill amount

  • If you've overpaid your VAT obligation, you'll automatically become eligible for a VAT refund from HMRC. You might also receive interest on the overpayment.

How to pay your VAT

Making VAT payments is straightforward. You can use any payment method listed by the due date:

  • Direct debit from your bank account

  • Electronic payments via online banking

  • Monthly payments, if preferred

  • Advance payments when required

N.B. Check the payment method you use ensures the payment will reach HMRC by the due date to avoid penalties and interest.

What happens if you miss the VAT deadline?

Missing deadlines can trigger immediate VAT penalties, late payment interest charges, and additional VAT return scrutiny. There is a VAT penalty points system, details of which can be found on the HMRC website. You will be asked to provide documentation to support a reasonable excuse claim if you submit late payments.

Do you need help with your VAT payment?

Ready to say goodbye to VAT worries? Unicorn Accountants is here to help! We'll work with you to create solid bookkeeping systems and keep your records in tip-top shape so you can rest easy knowing your VAT is handled.

We're more than just VAT experts, too! We can also assist with bookkeeping, annual accounts, self-assessment, and management accounting – everything you need to help your business thrive. Get in touch by dropping us an email at info@unicornaccountants.co.uk or fill out our online form for a call back. We'd love to chat about how we can support your business.

Frequently asked questions about VAT

Can I extend my deadline?

While standard deadlines aren't flexible, HM Revenue and Customs may consider a payment arrangement for businesses facing temporary difficulties. Contact them before your due date to discuss options and avoid late VAT payments, penalties, and fines.

How does Making Tax Digital (MTD) affect VAT payments?

MTD has changed how you submit VAT returns by requiring digital record-keeping. However, your deadline and VAT period timings remain unchanged.

What if I've overpaid my VAT?

If you've been paying more VAT than necessary, you'll receive a VAT refund. HMRC typically processes refund claims within 10 working days and may even pay repayment interest in certain circumstances.

What are payments on account?

Businesses with high VAT liabilities (£2.3 million or more annually), must use Payments on Account. This means making two advance payments per quarter based on estimated VAT liability. The schedule is:

  • First Payment – Due at the end of month 2 in the VAT quarter.

  • Second Payment – Due at the end of month 3 in the VAT quarter.

  • Balancing Payment – Due one month and seven days after the quarter ends.

What are VAT penalty points?

Think of the VAT penalty points system as like getting points on your driving licence. If you submit your VAT return or make a late tax payment, you'll get a penalty point. If you get enough points (the number depends on how often you submit your VAT return), you'll have to pay a £200 fine. The thresholds are:

Accounting period

Penalty points threshold

Annually

2

Quarterly

4

Monthly

5

 

What is voluntary disclosure?

If you find a mistake on your VAT return or need to tell HMRC about unpaid VAT, you can use their online service or fill out form VAT652. It's always a good idea to correct any errors yourself as soon as possible – this can often help avoid or reduce penalties.