UK Introduces Deadline Extension for Final VAT Returns

UK Formalises Option to Extend Deadline for Final VAT Return

This upcoming change in VAT regulation will affect businesses in the UK that are cancelling their VAT registration — in other words, companies that are de-registering from VAT.

Currently, when a business de-registers from VAT, it must submit a final VAT return within one month after the cancellation date. If the return is filed electronically, there’s a one-week extension. Payment is also due by the same final day. If the business misses the deadline, penalties and interest can be charged — even when delays happen because of issues outside the business’s control, like processing delays at HMRC.

To address this, HMRC has often allowed extra time through an informal administrative concession. Now, this change will make that flexibility part of the law.

The aim is to make the process fairer. The new regulation will give HMRC the legal power to extend the deadline for final VAT returns. This is especially helpful when delays or compliance checks make it difficult or impossible for businesses to submit their final return on time.

This change aligns the rules for final returns with those for regular VAT returns, where HMRC already has the power to extend deadlines.

When Will the New Rule Apply?

The change is expected to take effect from 13 June 2025, once the new regulation — the Value Added Tax (Amendment) Regulations 2025 — is formally introduced in May.

Right now, the rules are set out in Regulation 25(4) of the Value Added Tax Regulations 1995. This rule says businesses must file a final VAT return within one month after deregistering. However, it doesn’t give HMRC the power to extend this deadline.

The amendment will add a new paragraph, 25(4AA), to give HMRC the authority to extend the deadline by official direction — even if the original deadline has already passed.

Learn more about UK VAT returns in our VAT manual.

What Does This Mean for Businesses?

If your business is planning to de-register from VAT, this change means:

• You might get more time to prepare and submit your final return, especially if there are processing delays or compliance checks.
• You’re less likely to be penalised for late submission caused by delays that aren’t your fault.
• The process becomes more consistent with how other VAT returns are handled.

This is a small but important change in UK VAT rules. It helps businesses avoid unfair penalties and brings more clarity and consistency to the de-registration process.

For official details, you can read the full regulation on the UK Government’s website.

How Marosa Can Help with VAT Compliance in the UK

At Marosa, we specialise in helping businesses manage their VAT obligations across the UK and the EU using our own software solution, VATify. Whether you're registering for VAT, filing regular returns, or going through the de-registration process, our team of experts is here to ensure you're fully compliant and up to date with the latest regulations.

Our VAT compliance services include:

• VAT registration and de-registration support
• Preparation and filing of VAT returns
• Guidance on UK-specific requirements, including final return deadlines
• Communication with HMRC on your behalf
• Support during audits and compliance checks

With ongoing regulatory changes like the one discussed in this article, having the right VAT partner can help you avoid penalties, reduce administrative burden, and focus on your business.

Need Help with UK VAT? Contact our team.