Completing and submitting a VAT return
In this section:
Missed VAT deadlines: penalties and surcharges
You must file your VAT return and pay any VAT you owe by the due date. If you don't, you may be surcharged a percentage of your unpaid VAT. If you continue to file or pay late, you will be charged a higher percentage of your unpaid VAT. You may also be fined.
This guide explains what happens if you miss VAT filing and payment deadlines and what you should do to avoid financial penalties. If you have difficulty paying your VAT, you should still send in your VAT return on time and then contact HM Revenue & Customs (HMRC) about your payment problems.
On this page:
- Surcharges if you miss VAT return filing or VAT payment deadlines
- When you will not be surcharged for late filing or late payment
- Appealing against a surcharge
- What to do if you are having trouble paying VAT
- More useful links
Surcharges if you miss VAT return filing or VAT payment deadlines
You must file your VAT return and pay any VAT by the due date. If HMRC receives your VAT return or VAT payment after the due date, you are 'in default' and may have to pay a surcharge in addition to the VAT that you owe.
Find out about VAT filing and payment deadlines
The first time you default, you will be sent a warning known as a 'Surcharge Liability Notice'. This tells you that if you pay late ('default') again during the following 12 months - known as your surcharge period - you will be penalised.
If you file or pay late again during your surcharge period you will have to pay a 'default surcharge'. This is a percentage of your unpaid VAT. If you don't file a correct VAT return, we will estimate the amount of VAT you owe and base your surcharge on that amount (known as an assessment).
Your first default surcharge will be 2 per cent of your unpaid VAT.
You will be sent a 'Surcharge Liability Notice Extension' that extends your surcharge period for an additional 12 months. Each time you do not file or pay your VAT on time, your surcharge period will be extended for a further 12 months.
If you continue to make late payments you will be charged increasing penalties of 5 per cent, 10 per cent and 15 per cent of your unpaid VAT. In addition we may increase the estimated amount of VAT you owe us and base the increased penalties on that amount.
If you are persistently late in filing your VAT return and paying your VAT, you may be also be fined.
Find out what can happen if you persistently file or pay your VAT late
When you will not be surcharged for late VAT return filing or late payment of VAT
Although you are 'in default', you will not be surcharged for late filing and/or late payment if you:
- file a nil return late (eg where you have not charged VAT nor paid VAT)
- file a return late when you are due a VAT repayment
- file a return late when you have paid your VAT on time
- file a return late or pay late for the first time and your turnover is less than £150,000 a year
- have what HMRC accepts is a reasonable excuse in your particular circumstances such as a computer breakdown, loss of records or illness
Appealing against a surcharge
If you think you should not have been surcharged, or if you think that the amount you have been surcharged is too high, you can ask HMRC to take another look at the charges and/or your 'default liability'. You must do this within 30 days of receiving your surcharge notice or extension. You can also appeal against the surcharge or the default liability to a VAT tribunal.
Contact us to ask us to reconsider a surcharge
Find out how to appeal against decisions made by us about your VAT affairs
What to do if you are having trouble paying VAT
If you have difficulty paying your VAT, you should still send in your VAT return on time and then contact HMRC about your payment problems.
What to do if you have trouble paying VAT
Find out how to contact us if you have a payment problem
More useful links
Read more about what to do if you can’t pay the VAT you owe us
