Do I have to file a VAT return if I had no sales?

Yes — a nil return is required every accounting period; late nil returns still earn a penalty point.

Can I still file my VAT return on paper?

Only with an exemption — for example, religious objection to computers, no internet access, or insolvency. Everyone else must use Making Tax Digital-compatible software; an unauthorised paper return can attract a penalty of up to £400.

What if my VAT return shows I owe HMRC nothing but I filed late?

The penalty point applies regardless of whether any VAT was due. File the return anyway, as soon as possible, then file the next returns on time to start clearing points.

How do I correct a small error on an old VAT return?

If the net value of the errors is £10,000 or less (or up to £50,000 and under 1% of sales), adjust the figures in your next return. Keep details of the error and include the value in your VAT account.

What happens if I cannot pay my VAT bill by the deadline?

Contact HMRC immediately. A Time to Pay arrangement can stop late-payment penalties from building, though interest still accrues.

Can I reclaim VAT on unpaid customer invoices?

Possibly, through bad debt relief: once the debt is more than 6 months old, reclaim the VAT in your return if you claim within 4 years and 6 months of when payment was due (or the date of supply, whichever is later), you did not sell the debt on, and you did not charge more than the normal price.

How to File a VAT Return in the UK: 2026/27 Guide

A VAT return tells HMRC how much VAT your business has charged on sales (output VAT) and how much it has paid on purchases (input VAT) during a set period. If you are VAT-registered, filing accurate returns on time is one of your main legal duties.

This guide walks through the whole process step by step: when to file, how Making Tax Digital works, what goes in each of the nine VAT return boxes, how to pay, how to correct errors, and what happens if you file late. It uses only current HMRC rules for the 2026/27 tax year.

2026/27 context: the standard UK VAT rate is 20%, with 5% and 0% rates for specific supplies, and the VAT registration threshold is £90,000 of taxable turnover.

When do you file a VAT return?

Most VAT-registered businesses file a VAT return every 3 months — this window is your accounting period, allocated by HMRC based on when you register.

You must file even if you have no VAT to pay or reclaim: a nil return with zeros in the boxes. Filing late because "there was nothing to report" still earns a penalty point.

If you have not yet registered and are nearing the threshold, see When to Register for VAT UK.

The filing and payment deadline

The deadline for a VAT return is 1 calendar month and 7 days after the end of your accounting period. This single deadline covers both submitting the return online and the payment reaching HMRC's bank account.

For example, if your accounting period ends on 30 June, your deadline is 7 August. The deadline stands even on weekends and bank holidays. The only payment exception is Direct Debit, collected slightly differently (see "How to pay HMRC" below).

Making Tax Digital: you must use approved software

You must submit your VAT return using Making Tax Digital-compatible accounting software. Paper VAT returns are no longer the norm, and filing a paper return without an exemption can trigger a penalty of up to £400.

The process in practice: keep digital VAT records in (or linked to) your accounting software, prepare the return from those records, and submit it digitally — the software sends the return to HMRC through an API link. You do not type the figures into the HMRC website manually.

Exemptions are narrow: religious objection to computers, no internet access, or an insolvency procedure. If you have cancelled your VAT registration, use your VAT online account instead of software.

What records to keep for your VAT return

For each VAT accounting period you need:

All sales invoices showing the VAT charged, the rate used, and the total including VAT.
All purchase invoices showing the VAT paid and the supplier's details.
Credit notes issued and received.
Import and export documentation where relevant.

Keep these records for at least 6 years (10 years for the VAT Mini One Stop Shop). If your software flags missing invoices before you submit, chase them down — fixing an error afterwards is always more painful.

For more on getting VAT amounts right on the invoices themselves, see VAT on Invoices UK.

The 9 boxes: what goes where

Box 1 — VAT due on sales and other outputs in this period.
Box 2 — VAT due on acquisitions from the EU (Northern Ireland businesses buying goods from the EU).
Box 3 — Total VAT due (Box 1 plus Box 2).
Box 4 — VAT reclaimed on purchases and other inputs in this period.
Box 5 — Net VAT to pay HMRC or reclaim (Box 3 minus Box 4).
Box 6 — Total value of sales and all other outputs excluding VAT.
Box 7 — Total value of purchases and all other inputs excluding VAT.
Box 8 — Total value of dispatches of goods to the EU (Northern Ireland only).
Box 9 — Total value of acquisitions of goods from the EU (Northern Ireland only).

One important rule: include VAT on the full value of what you sell even when the deal is a part-exchange or when you did not charge VAT separately. In that case the price is treated as VAT-inclusive, so the VAT is worked out as 1/6 of the total at the 20% rate.

Filing an inaccurate return can be expensive: the penalty can be up to 100% of any tax under-stated or over-claimed.

Worked example 1: filling the boxes (VAT payable)

A business filing a quarterly VAT return has:

Sales (excluding VAT): £40,000 at 20% → output VAT of £8,000
Purchases (excluding VAT): £15,000 at 20% → input VAT of £3,000

The return boxes are filled as follows:

Box 1 (VAT on sales): £8,000
Box 2 (EU acquisitions): £0
Box 3 (total VAT due = Box 1 + Box 2): £8,000 + £0 = £8,000
Box 4 (VAT reclaimed on purchases): £3,000
Box 5 (net VAT to pay = Box 3 − Box 4): £8,000 − £3,000 = £5,000 payable
Box 6 (sales excluding VAT): £40,000
Box 7 (purchases excluding VAT): £15,000
Box 8 (dispatches to EU): £0
Box 9 (acquisitions from EU): £0

The business submits the return by the deadline and pays £5,000 to HMRC.

Worked example 2: a reclaim position

A business in a growth quarter buys more than it sells:

Sales (excluding VAT): £10,000 at 20% → output VAT of £2,000
Purchases (excluding VAT): £25,000 at 20% → input VAT of £5,000

Box 1: £2,000
Box 2: £0
Box 3 (Box 1 + Box 2): £2,000 + £0 = £2,000
Box 4: £5,000
Box 5 (Box 3 − Box 4): £2,000 − £5,000 = −£3,000
Box 6: £10,000
Box 7: £25,000
Box 8: £0
Box 9: £0

Because Box 5 is negative, the business reclaims £3,000 from HMRC.

For the VAT maths behind these examples, see How to Add VAT to a Price UK and How to Take VAT Off a Price UK.

How to pay HMRC

Paying your VAT bill shares the same deadline as filing the return:

Direct Debit — set it up at least 3 working days before you submit. HMRC collects it 3 working days after the payment deadline. It cannot be used for payments over £20 million, payments from overseas bank accounts, payments on account, or insolvency cases.
Bank transfer (Faster Payments, CHAPS or Bacs) — use your 9-digit VAT registration number with no spaces as the payment reference.
Online through your bank or by debit or corporate credit card. Personal credit cards are not accepted, and there is a fee for corporate credit cards.

If you are paying a surcharge or penalty, use the 14-character reference starting with X rather than your VAT registration number.

If you cannot pay on time

Contact HMRC as soon as possible. A Time to Pay arrangement can stop late-payment penalties accruing — though interest still builds on the outstanding balance.

Correcting errors on your VAT return

Net value of errors of £10,000 or less — adjust the figures in your next VAT return.
Net value of errors between £10,000 and £50,000 — also adjust in your next return, but only if the errors are less than 1% of your total sales.
Everything else — errors over £50,000, errors over £10,000 that are more than 1% of sales, and deliberate errors must be reported to HMRC separately (not folded into the next return).

Always keep a record of the error — what it was, which period it relates to, and its value — and include that value in your VAT account.

If you import goods, postponed VAT accounting lets you declare and reclaim import VAT on the same return instead of paying it at the border.

If you report your VAT when cash actually moves rather than when invoices are raised, these rules sit on top of your normal figures — see VAT Cash Accounting Scheme Explained.

Late filing and late payment penalties

For VAT accounting periods starting on or after 1 January 2023, late returns attract penalty points:

Each late return earns 1 penalty point, including nil returns.
At the threshold — 2 points for annual filers, 4 for quarterly filers, 5 for monthly filers — a £200 penalty applies, plus a further £200 for each subsequent late submission while you are at the threshold.
Points are removed by filing on time afterwards.

For example, a quarterly filer with four late returns reaches 4 points and owes £200; another late return while at the threshold costs a further £200.

Filing checklist before you press submit

All sales and purchase invoices for the period are in your software.
The VAT rates (20%, 5%, 0%) are correct on every line.
Box 3 = Box 1 + Box 2; Box 5 = Box 3 − Box 4.
Box 6 and Box 7 exclude VAT; Box 5's sign is right (positive = pay, negative = reclaim).
Any error corrections from the previous period are included.

How to File a VAT Return in the UK