You Have Missed the Deadline. Nothing Has Been Charged Yet.

A VAT return is due one calendar month and seven days after the end of the VAT period. Miss it and HMRC does not issue an instant fine — it issues a penalty point. The money only starts when the points stack up, or when the payment is late as well.

That distinction matters, because the two clocks run separately and only one of them is expensive straight away.

The Deadline You Just Missed

Quarter ending 31 March — due 7 May
Quarter ending 30 April — due 7 June
Quarter ending 31 May — due 7 July
Quarter ending 30 June — due 7 August
Quarter ending 31 July — due 7 September
Quarter ending 31 August — due 7 October

The same date applies to both the submission and the cleared payment. If you pay by Direct Debit, HMRC normally collects around three working days after the deadline, but the return itself still has to be in by the 7th.

Late Submission: Points, Not Pounds

Since January 2023 HMRC has run a points-based late submission regime. Every return filed after the deadline earns one point. You are charged £200 only when you reach the points threshold for your filing frequency.

Monthly filers: 5 points, then £200
Quarterly filers: 4 points, then £200
Annual filers: 2 points, then £200

Once you are at the threshold, every further late return costs another £200. A quarterly filer who is habitually a week late therefore pays nothing for a year and then £200 every quarter indefinitely.

How to Get Rid of Penalty Points

Points do not sit on your record forever, but clearing them is deliberately slow.

Individual points expire after about two years — 24 months after the missed deadline, or 25 where that deadline fell at a month end — provided you have not reached the threshold.
Once you are at the threshold, you must serve a period of compliance — 12 months for quarterly filers, 6 months for monthly, 24 months for annual — filing every return on time, and have submitted all returns due in the previous 24 months. Only then does the whole balance reset to zero.

That second condition catches people out. A missing return from 18 months ago will keep your points frozen at the threshold no matter how punctual you are now. Filing every outstanding return, even a very late one, is the only way to start that clock.

Late Payment: This Is the Expensive One

Late payment penalties are charged as a percentage of the VAT you owe, and they escalate.

Days 1 to 15: no penalty at all, although interest is already running.
Days 16 to 30: a first penalty of 3% of the amount that was outstanding at day 15.
Day 31 onwards: that first penalty becomes 3% of what was outstanding at day 15 plus 3% of what was still outstanding at day 30.
Day 31 onwards: a second penalty starts as well, accruing daily at 10% per year until the balance is cleared.

On top of the penalties, HMRC charges late payment interest at the Bank of England base rate plus 4 percentage points — 7.75% since 9 January 2026 — running from the day after the due date until the balance is cleared.

Worked Example: £8,000 Paid 45 Days Late

First penalty at day 15 — 3% × £8,000 = £240.00
First penalty at day 30 — 3% × £8,000 = £240.00
Second penalty, days 31 to 45 — £8,000 × 10% × 15/365 = £32.88
Interest for 45 days — £8,000 × 7.75% × 45/365 = £76.44
Total: £589.32

Plus one penalty point on the submission side. The same £8,000 paid on day 14 would have cost £23.78 in interest and nothing else.

File First, Then Worry About Paying

The single most useful thing to understand about this regime: submitting the return and paying the VAT are separate obligations with separate penalties. You are not required to pay in order to file.

So if the money is not there yet:

File the return today. It stops the next penalty point landing and starts the clock on clearing the ones you have.
Then propose a Time to Pay arrangement with HMRC. HMRC's own guidance is explicit that an agreed arrangement "can mean lower, or no, late payment penalties", because the penalty is worked out by reference to the date you proposed the plan rather than the date the money arrives. Propose it before day 15 and you can avoid the first 3% charge altogether. Interest still runs, and you have to keep to the plan.

Waiting until you can pay before you file is the most common and most expensive mistake in the whole VAT calendar.

How to File a Late VAT Return in Ten Minutes

If your figures are already in a spreadsheet, you do not need to migrate your books to file:

Create an account and connect to HMRC with your Government Gateway ID.
Your open obligation periods come back from HMRC, so you file against the correct quarter rather than guessing.
Download the nine-box template, fill in the values from your own records, and upload it.
Pay £4.99 for the single submission and file. HMRC's receipt is stored in your filing history.

That is what AccLedger's VAT bridging software is built for, whether you file as a sole trader or a limited company — £4.99 per submission, no subscription, no migration, no data to categorise. If you would rather have the nine boxes calculated from your actual bookkeeping instead of a spreadsheet, the full MTD VAT module does that from the same account. If your figures come out of SAP, SAP VAT integration files them without an export step at all.

Frequently Asked Questions

How late can I file a VAT return? There is no cut-off. HMRC keeps the obligation period open and you can file it at any point. The longer you leave it, the more interest accrues on the unpaid VAT, and the longer your penalty points stay on the record.

Does a late VAT return automatically mean a fine? No. A single late quarterly return earns one penalty point. The £200 charge only applies once you reach four points, and then on every late return after that.

Can I appeal a VAT penalty? Yes. HMRC will consider a reasonable excuse — serious illness, bereavement, a fire or flood, a genuine HMRC service failure. Not having the money is explicitly not a reasonable excuse; not knowing the deadline is not either.

Do penalty points apply to nil returns? Yes. A nil return is still a return. Filing it late earns a point exactly the same way, which is a common and entirely avoidable source of points for dormant or seasonal businesses.

I have several outstanding returns. What order should I file them in? Oldest first. Points cannot be cleared while any return from the previous 24 months is missing, so the priority is getting every open obligation closed rather than getting the most recent one perfect. If an accountant is catching up several clients at once, multi-company filing keeps each one's obligations and receipts separate.

Stop the next penalty point. File your VAT return now for £4.99 — HMRC-recognised, no subscription, and you keep your spreadsheet.

Sources: HMRC guidance on penalty points for late VAT returns and late payment penalties. Rates correct as at August 2026.

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