United KingdomManual

The UK has a standard VAT rate and one reduced VAT rate. In addition, a number of items are zero rated

VAT returns in UK

Frequency of UK VAT returns

As a general rule, VAT returns are filed quarterly in the UK.

Monthly VAT returns can be requested by the taxpayer in case of regular repayment traders (e.g. Frequent exporters). HMRC may also ask a business to make monthly payments on account. These payments are advanced payments that are deducted from the overall quarterly payment when filing the quarterly VAT return. payments on Account are mandatory for businesses with a VAT liability exceeding £2.3 million.

In the UK, the quarterly period does not always follow the calendar quarter. Businesses will choose their quarterly period when registering for online VAT services.

Annual VAT returns are allowed when your taxable turnover is below £1.35 million. The Annual VAT Accounting scheme requires advance payments throughout the year. Only one return is submitted for the complete 12-month period, this return may require a payment or a refund depending on the advance payments made during the year.  More information on Annual VAT accounting is available in the online information published by the authorities.

  • Frequency of filing

  • Monthly

    Regular repayment traders (upon request)

    Payments: VAT liability exceeds £2.3 million

  • Quarterly

    Standard reporting period
  • Annual

    Taxable turnover below £1.35 million

    (upon request)

When is VAT return due dates (deadlines)

You should check your VAT return submission and payment deadline in your HMRC online account. As a general rule, the due date to submit and pay VAT returns in the UK is the 7th day of the second month following the reporting period.

More information about the applicable deadlines is available here.

Businesses on the Annual VAT accounting scheme have different deadlines. These deadlines are published by the tax authorities.

Also, those businesses on the Payments on Account scheme have different deadlines. You can check them in the online information published by the authorities.

If the due date falls on a Sunday or bank holiday, the date is shifted to the previous working day.

UK VAT payments

VAT payments in UK can be made using different systems. The tax authorities accept BACS, CHAPS, direct debit, credit card or payments through online telephone banking. The bank details change depending on the method used. Taxpayers should also take into account the applicable delays until the payment becomes effective, as there is a risk of late payment due to this delay.

Non-established companies will often make payments from an overseas account. The details to be used for these payments are the following:

  • IBAN number: GB36BARC20051773152391
  • BIC Code: BARCGB22
  • Account holder: HMRC VAT
  • Bank address: Barclays Bank PLC; 1 Churchill Place; London; E14 5HP; United Kingdom.

The reference to be included when making VAT payments from an overseas bank account is the VAT number of companies. You should double check the above information before making a payment to HMRC.

You can find more information about tax payments in UK in the guidance published by HMRC on VAT payments

UK VAT refunds

VAT repayments are automatically refunded by the UK tax authorities into the UK bank account of the company. It is not possible to carry forward a VAT credit to the next reporting period. Normally, it takes 10 to 15 days to get a VAT refund from the day the VAT return is submitted.

In the past, a UK bank account was mandatory to get your refunds via bank transfer. In case you did not have a UK account, HMRC would issue a check in the name of the company that can be cashed in an overseas bank account. If this check cannot be cashed, the business would need to open a UK bank account to get the VAT refund. Very often, these non-established companies face issues to receive and cash the cheques issued by HMRC. 

In November 2021, in order to ease this procedure, HRMC published an update on this procedure so it is possible for non-established businesses to obtain a refund in their foreing bank account. In order to benefit from this update, a form providing the bank account details of the company must be submitted. Once done, next time your company is in refund position, tax authorities will send an electronic repayment order instead of the old paper check.

The tax authorities may ask additional questions or carry an audit before accepting a repayment. In these cases, the VAT refund would be delayed.

More information is available in the online guidelines published by the authorities, and under the following link to the update announced by HRMC.

UK nil and corrective VAT returns

A nil VAT return needs to be submitted even if there are no transactions to be reported for that period.

Regarding corrections, there are two ways to correct your VAT returns:

  • Method 1: Adjusting the error in your current VAT return. This method can be used if the net value of your error does not exceed £10,000 or the error is between £10,000 and £50,000 but does not exceed 1% of box 6 for the current period.
  • Method 2: Submitting a corrective return with the form VAT652 or sending a Voluntary Disclosure (Error Correction Notice) to the competent tax officer. This method is mandatory if the net value of your error is between £10,000 and £50,000 and exceeds 1% of the box 6 amount for the current period during which the error is discovered or, in any case, if the error is greater than £50,000

More information on how to correct your VAT return is available in the VAT notice published by HMRC on VAT return corrections. 

VAT penalties in UK

The following table summarizes the VAT penalties regime in the UK:

  • Cause
  • Late filing
    In practice, there are no penalties for a late VAT return provided the payment has been made in time. However, a "Surcharge Liability Notice" may be initiated when missing one return. See below
  • Late payment

    The UK authorities send a "warning" the first time a VAT return or a VAT payment is missed. The warning is called "Surcharge Liability Notice" and gives the taxpayer a 12-month trial period in which, if the error is repeated, a penalty will be charged

    In case the conditions in the Surcharge Liability Notice are not met (e.g. error repeated), a surcharge of 2% of the VAT due will apply. This penalty will increase to 5%, 10% or 15% if the error is repeated again. Also, an extended "Surcharge Liability Notice" will be issued

    More information available in the online guidance published by the tax authorities

  • Late registration

    As such, there is no one-off penalty for a late VAT registration. However, late VAT payment penalties in periods in which you are not VAT registered will be fined as follows:

    - Less than 9 months late: 5% of VAT due

    - 9 to 18 months late: 10% of VAT due

    - More than 18 months late: 15% of VAT due

If any other purchase under the reverse charge mechanism is missed, the UK authorities will normally not apply any penalties.

Additional penalties may be charged by the authorities, particularly in case of fraud.

For penalties on Intrastat and other returns, please see the relevant section.

UK Tax authorities contact

UK has a dedicated department for non-established companies. All VAT registrations for these businesses, as well as other VAT matters, are handled by the Non-established Taxable Persons Unit (NETPU).

Ruby House
8 Ruby Place
AB10 1ZP

Email: vrs.netpu@hmrc.gsi.gov.uk

Teléfono: +44 3000 527458

Established businesses should check in their VAT registration certificate the office that has been allocated to the company.

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