Every three (3) months, a Value added tax (VAT) return is normally submitted to the HM Revenue and Customs (HMRC). A VAT return records the following things:

  • total sales and total purchase
  • the VAT amount payable
  • VAT amount that can be reclaimed
  • VAT refund due from HMRC

A VAT return needs to be submitted even though no VAT amount is due or needs to be reclaimed

Final VAT Returns

Once the VAT registration is cancelled, final VAT returns needs to be submitted. This task can be easy done online using the VAT online account. In case of insolvency, HMRC will send a paper version that needs to be completed if the registration is cancelled.

Before submitting a VAT return online, it is necessary to:

  • register for HMRC online services
  • sign up or enroll for the VAT online service


Log into and follow the instructions


VAT returns must be submitted online unless:

  • the business is under discussion for insolvency procedure – if a limited company turns insolvent, it can opt for a Company Voluntary Arrangement (CVA) to pay back the creditors over a specific time period. The limited company can continue trading if the creditors agree to it
  • the business has an objection on using computer on the basis of religious grounds
  • online services can’t be used because of age, any disability or if the operations are in an area where internet access is restricted

In case, a business is unable to submit the returns online, they need to get in touch with HMRC VAT enquires helpline to understand the procedure. DNS Accountants can help businesses with their VAT return questions and provide additional information such as allowances and tax codes. Our learned team of tax professionals can also help and support individuals with Self Assessment.

To submit a VAT return online, the business needs a VAT number and an online VAT account

Using accounting software

Businesses can either login to the online VAT account and complete the VAT return or file the return using an accounting software. Accounting software like Nomisma Solution allows the business the ease to submit their VAT returns directly to HMRC. The business should record the reference number as a proof.

Using accountants or agents

Businesses are required to authorize accountants like DNS Accountants to help them submit the VAT returns.


A user only needs to complete the enrollment and registration process only once. Registration is required even if the free HMRC VAT online service is used or if the operations are carried out using commercially available software. Initially, when a user registers for the online VAT service, he / she are given a User ID and are required to generate a password. The user ID and password must be noted down and should be kept at a safe place as it will be required by the user each time they attempt to login for the online service. Upon completing the enrollment process, a user can set up an e-mail reminder for HMRC to prompt regarding the next online VAT return.

To use additional features, such as, changing the VAT registration details, of the online VAT service user need to activate or switch on this service. Once a user had signed up for VAT online, HMRC automatically send an activation PIN or activation code through postal service. The received PIN / CODE needs to be used only once within 28 calendar days from the date of issue.

To enroll and register for online Value added tax services, businesses need the keep track of the following information:

  • Value added tax registration number
  • postcode of the primary place of business
  • Value added tax registration date
  • month of the previous VAT return submitted (i.e. if the return was submitted for the period October to December, the date to use will be December)
  • the net VAT repayable or due on the last VAT return


Users can login into their online VAT account to check their VAT return and payment deadlines. The value added tax account provides details such the VAT return due date and date when the payment should clear HMRC’s account. Normally, the deadline for putting forward the online return and making the payment to HMRC is 1 calendar month and seven (7) days post the end of an accounting period. If a business uses an annual accounting scheme, the deadline will be different.

Annual Accounting Scheme

Businesses registered for VAT are required to submit their value added tax return four (4) times during a year. With the Annual Accounting Scheme:

  • based on the prior year’s return businesses can make advance value added tax payments
  • by doing so, the businesses will submit one VAT return per year

When a business submits an advance VAT return, the business either:

  • make a final payment - the difference between the actual Vat amount and the advance payment
  • applies for a refund, in case, excess VAT is paid

The annual accounting scheme is not suitable for businesses if the business on a regular basis reclaims VAT because under this scheme the business will only be eligible for one (1) refund during a year. If a business estimates their VAT taxable turnover to be £1.35 million or less, it makes sense to opt for this scheme.

Businesses can also discuss with DNS Accountants to get advice on which scheme will be best suited for them.


HMRC considers the following activities as a default:

  • if the VAT return is not filed by the deadline
  • if the actual VAT amount due is not received by the deadline

What will be the fine amount?

For the accounting period that is in default, surcharge is a percentage of the VAT amount outstanding on the due date. If the business defaults again in a surcharge period, the surcharge rate increases with every default. There is no charge for the first default and the business pays for the subsequent defaults as follows:

Defaults inside 12 months Surcharge if twelve-monthly turnover is under £150,000 Surcharge if twelve-monthly turnover is £150,000 or above
2nd No surcharge 2% surcharge is payable if amount is less than £400
3rd 2% surcharge is payable if amount is less than £400 5% surcharge if payable if amount is less than £400
4th 5% surcharge is payable if amount is less than £400 10% surcharge or £30 (which-ever is higher)
5th 10% or £30 (whichever is higher) 15% or £30 (whichever is higher)
6 or more 15% or £30 (whichever is higher) 15% or £30 (whichever is higher)


No surcharge is applicable if a late VAT return is submitted and:

  • the business pays VAT in full by the due date
  • there is no tax to pay
  • a VAT repayment is due


HMRC can charge you a penalty of up to:

  • 100% of tax amount under-stated or over-claimed in case the business sends a return that has a careless or intentional inaccuracy
  • £400 if a paper VAT return is submitted, unless HMRC has stated that the business is exempt from submitting a return online


DNS Accountants has years of experience in helping businesses with online Value added tax return. Our team comprise of skillful ACA’s or Chartered Accountants (CA) and the firm takes pride in saying that we are very transparent and helpful to our clients & deliver incomparable client service. The firm’s learned team focuses on helping owner-managed businesses and sole traders with HMRC VAT online return filing and addressing any queries they have. DNS Accountants offers service:

  • At a FIXED price
  • Service which is unmatched, consistent, and transparent
  • Tax planning and accurate filing

Other services

DNS Accountants offers bookkeeping, accounts management, taxation & self assessment services to owner-managed-businesses or self employed individuals. For business owners and freelancers / contractors, it is difficult to keep pace with the ever changing government regulations and rules and DNS takes responsibility of all the accounting needs of the business

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