How to submit a VAT return online: step-by-step guide for 2026

How to submit a VAT return online: step-by-step guide for 2026

VATtaxHMRCMTDsole-trader

How to submit a VAT return online: step-by-step guide for 2026

By InvoiceAdept Team12 March 2026Updated 16 August 20265 min read

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How to submit a VAT return online: step-by-step guide for 2026

Once you are VAT-registered, submitting your return on time every quarter is non-negotiable. HMRC charges surcharges and penalties for late returns — and the process, while not complicated, trips up plenty of tradespeople the first time they do it.

This guide walks through the entire process from start to finish, including the Making Tax Digital changes that now affect most VAT-registered businesses.

Worth pairing this with Making Tax Digital for sole traders.

What is a VAT return?

A VAT return is a form you submit to HMRC every quarter (usually) showing the VAT you have charged your customers (output tax) and the VAT you have paid on your own purchases (input tax). If you charged more VAT than you paid, you pay the difference to HMRC. If you paid more than you charged, HMRC refunds you the difference.

Quick takeaway: VAT returns detail your VAT charges and payments; regular quarterly submissions are essential for UK tradespeople to avoid HMRC penalties.

Most VAT-registered businesses file quarterly, though monthly returns are available if you regularly receive refunds. Annual accounting is also an option for some businesses.

Making Tax Digital for VAT: what changed

Since April 2022, all VAT-registered businesses must submit returns through MTD-compatible software. You can no longer log in to the HMRC website and type figures in manually. Your software must connect directly to HMRC via an Application Programming Interface and submit on your behalf.

Related: MTD-compatible software for tradespeople.

This means you need accounting software — or a bridging solution — to file. HMRC maintains a list of approved MTD for VAT software providers. Popular options for UK tradespeople include Xero, QuickBooks, FreeAgent, and InvoiceAdept.

Step-by-step: submitting your VAT return

Step 1: Make sure your records are up to date

Before you do anything else, ensure all your sales invoices and purchase receipts for the quarter are recorded in your software. Every VAT invoice you issued and every VAT receipt you received needs to be in the system. Missing a receipt means missing input VAT you could reclaim.

Pro tip: Use software like QuickBooks or Xero to automate VAT calculations and reduce errors; costs typically start around £12/month.

Step 2: Review the nine VAT boxes

Your VAT return has nine boxes. Your software should populate most of these automatically from your records:

• Box 1: VAT due on your sales and other outputs

• Box 2: VAT due on acquisitions from EC member states (post-Brexit: usually 0)

• Box 3: Total VAT due (Box 1 + Box 2)

• Box 4: VAT reclaimed on purchases and other inputs

• Box 5: Net VAT to pay to HMRC (or reclaim) — Box 3 minus Box 4

• Box 6: Total value of sales, excluding VAT

• Box 7: Total value of purchases, excluding VAT

• Box 8: Total value of goods supplied to EC members (usually 0 post-Brexit)

• Box 9: Total value of goods acquired from EC members (usually 0 post-Brexit)

Check the figures make sense. Box 5 is what you owe (or are owed). If the number looks wrong, go back and check your records before submitting.

Step 3: Check for the domestic reverse charge

If you carry out construction work and are in the CIS supply chain, you may have issued reverse charge invoices where the customer accounts for VAT. Those sales go in Box 6 but not Box 1 (since you did not charge the VAT). Make sure your software handles this correctly.

For the tax angle, read domestic reverse charge VAT.

Step 4: Submit via your MTD software

In your accounting software, navigate to the VAT return section, review the figures one more time, then click submit. The software sends the data directly to HMRC. You should receive a confirmation reference number — keep this.

Step 5: Pay the VAT you owe

Submitting the return and paying the tax are separate actions. You need to pay Box 5 (if positive) by the same deadline — one calendar month and seven days after the end of the VAT period. So for a March quarter end, the deadline is 7 May.

HMRC accepts payment via:

• Online banking (BACS or Faster Payments using HMRC's bank details)

• Direct debit (if you have set one up)

• Corporate credit card (a 1.5% surcharge applies)

Do not pay by personal credit card — HMRC stopped accepting personal cards in 2018.

VAT return deadlines

Your VAT quarter end dates depend on when you registered. Common stagger groups are:

If you need the paperwork side too, see our guide to when to register for VAT.

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• March, June, September, December

• January, April, July, October

• February, May, August, November

For each period, the return and payment deadline is the same: one calendar month and seven days after the quarter ends. Mark these dates in your calendar. HMRC will send you reminders via the Government Gateway, but it is your responsibility to file on time.

Penalties for late returns

From January 2023, HMRC introduced a points-based penalty system for VAT. Each late submission earns a penalty point. When you reach the threshold (four points for quarterly filers), you receive a £200 penalty. Further late submissions after that result in further £200 penalties until you have a period of compliance.

Common mistake: Missing the VAT return deadline by even one day can lead to surcharges; set reminders to file on time.

Interest also accrues on any VAT paid late at HMRC's late payment rate.

What if you have nothing to pay?

You must still submit a VAT return even if the Box 5 figure is zero or if you are reclaiming VAT. A nil return or a repayment return must be filed by the same deadline. Missing it still earns a penalty point.

Useful tools

Our VAT calculator can help you estimate your VAT liability before your quarter closes. For an overview of the different VAT schemes available — including the flat rate scheme which can save some tradespeople money — see our guide on the flat rate VAT scheme for tradespeople.

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