How to Submit a Zero or Nil VAT Return?

If your business is registered for VAT in the UK, you must send a VAT return every quarter. Even if you did not make any sales or buy anything that needs VAT, you still have to send a VAT return. This is called a nil VAT return or zero VAT return.

It simply means you are telling HMRC that no VAT is owed or reclaimable for that period. Sending a nil VAT return on time is important to keep your VAT registration active and avoid fines.

What is a “zero VAT return” or “nil VAT return”?

A nil VAT return (also called a zero VAT return) is when you file a VAT return showing zero VAT due or reclaimed. It means your business had no taxable sales or purchases in the VAT accounting period.

You still have to submit it to HMRC if you are VAT registered. Filing nil VAT returns keeps your business compliant and shows HMRC that you acknowledge your filing obligations.

When Must You Submit a Nil VAT Return?

You should submit a nil VAT return in these cases:

• Your business made no sales or purchases subject to VAT in the period.
• You are VAT registered but haven’t started trading yet.
• Your business has temporarily stopped trading but remains VAT registered.
• You registered for VAT MOSS but have no transactions.
• You are below the VAT threshold but still VAT registered.

Submitting nil VAT returns regularly avoids penalties and keeps your VAT registration open without issues.

How to Submit a Nil VAT Return to HMRC?

Follow these steps to complete and submit your nil VAT return easily:

1. Prepare to file your VAT return:
   
   • Collect your VAT records (even zeros).
   • Log in to your HMRC online VAT account or open your accounting software linked to HMRC.
2. Fill in the VAT return with zeros:
   
   • Enter ’0.00’ in all the VAT boxes (including sales, purchases, and VAT due).
   • Your accounting software usually fills these automatically if there are no transactions.
3. Submit your return:
   
   • Online through the HMRC website.
   • Through compatible accounting software that sends VAT returns directly to HMRC.
   • By post using a paper VAT return form.
4. Confirm submission:
   
   • You will get a confirmation from HMRC when your nil VAT return is accepted.
   • Keep this confirmation safely for your records.

Deadlines and Penalties for Nil VAT Returns

You must submit your nil VAT return by the deadline for your VAT accounting period. Usually, this is one month and 7 days after the end of the quarter or month. Late submission of nil VAT returns is treated the same as late submission of normal VAT returns.

From 1 January 2023, HMRC introduced a penalty points system for late VAT returns, including nil returns.

• The penalty point threshold depends on your VAT return frequency:
  
  • Annual returns: 2 points threshold
  • Quarterly returns: 4 points threshold
  • Monthly returns: 5 points threshold
• Once you hit the threshold, you get a £200 penalty for the late return.
• You will get another £200 penalty for each further late submission while at that penalty point threshold.
• Penalties accumulate even if you have no VAT to pay or reclaim.
• Missing deadlines repeatedly can hurt your compliance record and lead to financial consequences.
• Some exceptions apply, such as your first VAT return and final VAT return after cancelling registration.
• Always submit nil VAT returns on time to avoid penalty points and fines.

Tips for Easy Nil VAT Return Submission

• Use accounting software with built-in VAT return submission features to get reminders and simplify filing.
• Check your VAT return carefully before submission to ensure all boxes have zeros.
• Keep proper VAT records, even if nil returns are filed.
• Contact HMRC if you are unsure about your nil VAT return obligations.

Conclusion

Submitting nil VAT returns on time is important. It keeps your VAT registration active and avoids penalties. Use HMRC’s online services or accounting software to submit nil returns easily, entering zeros in all VAT return fields. Always file before the deadline, even if your business had no VAT transactions.

If you would like to speak with our VAT expert and want assistance in filing of VAT returns or Nil VAT returns, please contact dns on 03300 886 686 or you can also email us at [email protected].

Frequently Asked Questions

About the author

Siddharth Agarwal
I am a Chartered Tax Advisor (OMB) and ACCA. I have 9+ years of experience in owner-managed business taxation issues, company reorganisations, property taxation, and succession planning. I also work with private clients on bespoke tax planning strategies for trusts, residence status, and non-residents. I aim to fulfil my professional duties towards my clients and keep them satisfied, my utmost priority. I believe in establishing and maintaining businesses and personal relationships as the key to mutual growth.