How Do I File a VAT Return in the UK

Filing a VAT return for the first time can feel daunting. Even for experienced business owners, VAT has a reputation for being fiddly, unforgiving, and full of rules that do not always feel intuitive. In practice though, once you understand the process and the logic behind it, filing a VAT return becomes a repeatable routine rather than a source of stress.

In this guide, I will walk you through exactly how to file a VAT return in the UK, from understanding what a VAT return actually is, through preparing your figures, to submitting the return to HMRC and paying what is due. I will also explain common mistakes I see, how Making Tax Digital fits into the process, and what to do if something goes wrong.

This is written from the perspective of someone who files VAT returns every week for clients across many sectors, not just from reading HMRC guidance.

What a VAT Return Actually Is

A VAT return is a report you submit to HMRC showing how much VAT you have charged on your sales and how much VAT you have paid on your purchases during a specific period.

The return calculates whether you:

Owe VAT to HMRC

Are due a VAT refund

Have no net VAT to pay or reclaim

Most VAT returns cover a three month period, although some businesses file monthly or annually depending on their VAT scheme.

The VAT return itself is not complicated in structure. It consists of nine boxes. The complexity usually comes from making sure the figures that go into those boxes are correct.

Before You Can File a VAT Return

Before you can file anything, there are some basic conditions that must be met.

You must:

Be registered for VAT

Have a Government Gateway account

Be signed up for Making Tax Digital for VAT

Keep digital VAT records

If you are newly VAT registered, HMRC will normally write to you confirming:

Your VAT registration number

Your VAT return periods

Your first VAT return deadline

Until you are registered and set up digitally, you cannot file a VAT return.

Understanding Your VAT Return Period

Your VAT return period is the time window covered by the return. For most businesses, this is quarterly.

A typical VAT quarter might be:

1 January to 31 March

1 April to 30 June

1 July to 30 September

1 October to 31 December

Your return deadline is usually one month and seven days after the end of the period.

So if your VAT quarter ends on 31 March, the deadline to submit the return and pay any VAT due is normally 7 May.

Missing this deadline can result in penalties and interest.

The Nine Boxes on a VAT Return Explained

Every UK VAT return uses the same nine boxes. Understanding what goes into each one is essential.

Box 1 – VAT Due on Sales

This box shows the total VAT you have charged on your sales during the period.

This includes:

Standard rated sales

Reverse charge VAT you must account for

Other output VAT due

It does not include the value of sales themselves, only the VAT element.

Box 2 – VAT Due on EU Acquisitions

For most businesses, this box is now usually zero.

It applies mainly to older EU acquisition rules and some Northern Ireland scenarios. Many VAT returns will legitimately show nothing here.

Box 3 – Total VAT Due

This is simply the total of Box 1 plus Box 2.

It represents the total VAT you owe before taking input VAT into account.

Box 4 – VAT Reclaimed on Purchases

This box shows the VAT you are reclaiming on your business expenses.

This can include VAT on:

Supplier invoices

Subcontractors

Overheads

Reverse charge VAT where recoverable

You must only include VAT you are legally entitled to reclaim and for which you hold valid VAT invoices.

Box 5 – Net VAT to Pay or Reclaim

This is the most important box for cash flow.

It is calculated as:

Box 3 minus Box 4

If the figure is positive, you owe VAT to HMRC.
If the figure is negative, HMRC owes you a refund.

Box 6 – Total Sales Value

This box shows the total value of your sales excluding VAT.

It includes:

Standard rated sales

Zero rated sales

Reduced rated sales

It does not include exempt income.

Box 7 – Total Purchases Value

This box shows the total value of your purchases excluding VAT.

Again, it includes net values only, not VAT.

Box 8 and Box 9 – EU Trade

For most UK businesses post Brexit, these boxes are often zero.

They relate mainly to specific EU and Northern Ireland trading scenarios.

Preparing Your VAT Figures

Before you file the VAT return, you need to prepare accurate figures.

In practice, this means:

Making sure all sales invoices are entered

Making sure all purchase invoices are entered

Checking VAT has been coded correctly

Reviewing reverse charge transactions

Checking for blocked VAT such as client entertainment

This preparation stage is where most VAT problems arise. The submission itself is usually the easy part.

Using Accounting Software to File VAT Returns

Under Making Tax Digital, most businesses file VAT returns using accounting software.

Popular software packages calculate the VAT return automatically based on the transactions entered.

The typical process is:

Enter all transactions for the period

Run the VAT return report

Review the figures carefully

Submit the return digitally to HMRC

Even with good software, I always recommend reviewing the numbers manually. Software can only work with the data it is given.

Filing a VAT Return Through HMRC

If your software is MTD compliant, it will submit the VAT return directly to HMRC.

You will usually:

Log into your software

Select the correct VAT period

Click submit

Receive confirmation that HMRC has accepted the return

You should always keep evidence of submission, such as confirmation screens or reference numbers.

Paying Your VAT

Submitting the VAT return and paying the VAT are two separate steps.

You must ensure payment reaches HMRC by the deadline.

Common payment methods include:

Direct Debit

Online bank transfer

Standing order

Debit card

Direct Debit is often the safest option, as it reduces the risk of missing a payment deadline.

What Happens If You Are Due a VAT Refund

If Box 5 shows a negative figure, HMRC owes you VAT.

In most cases, VAT refunds are paid within ten working days of the return being submitted, although this can take longer if HMRC carries out checks.

The refund is usually paid directly to your bank account.

Common Mistakes When Filing VAT Returns

Over the years, I see the same mistakes repeatedly.

These include:

Reclaiming VAT without valid invoices

Missing reverse charge VAT

Including exempt income in Box 6

Claiming VAT on client entertainment

Using the wrong VAT rates

Submitting late

Most of these errors are avoidable with good preparation.

What Happens If You Make a Mistake

If you discover a mistake after filing, do not panic.

Small errors can often be corrected on the next VAT return. Larger errors may require a formal VAT error correction.

The key is to address errors promptly rather than ignoring them.

Penalties for Late or Incorrect VAT Returns

HMRC now shows more tolerance for genuine mistakes, but penalties still apply for:

Late submissions

Late payments

Repeated errors

Careless or deliberate inaccuracies

Interest is also charged on late paid VAT.

Filing on time and keeping good records is the best protection.

Keeping Records After Filing

Once the VAT return is filed, you must keep:

VAT reports

Sales invoices

Purchase invoices

VAT workings

Evidence supporting the figures

These records must be kept for at least six years.

Good record keeping makes future VAT returns and HMRC checks far easier.

Filing VAT Returns as a New Business

For new businesses, VAT returns often feel more complex than they really are.

My advice is always the same:

Focus on accurate data entry

Understand the basics of VAT rates

Do not rush the submission

Ask questions early

VAT is much easier when dealt with regularly rather than at the last minute.

When I Recommend Getting Professional Help

Many business owners file VAT returns themselves very successfully.

However, I usually recommend professional help when:

The business grows quickly

International trade is involved

Construction reverse charge applies

Partial exemption applies

HMRC raises queries

Getting advice early often saves money and stress later.

Final Thoughts

So, how do you file a VAT return in the UK?

At its core, filing a VAT return is about:

Understanding your VAT obligations

Keeping accurate records

Reviewing your figures carefully

Submitting on time

Paying what is due

The VAT return itself is just the final step in a process that runs throughout the quarter.

In my experience, businesses that treat VAT as a routine system rather than a once a quarter panic point rarely have problems. Those that leave it until the deadline often do.

Once you understand the structure and the logic, filing a VAT return becomes a normal part of running a compliant UK business rather than something to fear.