If you run a small business or work as a landlord with a growing rental portfolio, VAT can feel like one more thing to keep track of. Getting the deadlines right matters, because HMRC applies penalties for late returns and late payments, even when the VAT itself is correct.
Do you need to register for VAT?
If your VAT-taxable turnover goes over the current registration threshold of £90,000 in any rolling 12-month period, you must register with HMRC. You can also register voluntarily below that threshold, which some smaller businesses choose to do so they can reclaim VAT on purchases.
The threshold is measured as a rolling figure, not a single year from January to December, so it's easy to tip over without realising it. You need to keep an eye on your turnover each month and register within 30 days of the end of the month in which you crossed the line. Voluntary registration can make sense if you mainly sell to other VAT-registered businesses, because the VAT you charge is simply passed on and reclaiming input VAT on your own purchases can leave you better off. It's worth modelling both scenarios before deciding, as registration also means charging VAT on your prices and additional filing obligations.
When are VAT returns due?
Most businesses file VAT returns quarterly. Your filing and payment deadline is one calendar month and 7 days after the end of your VAT period. So if your quarter ends 31 March, your return and payment are due by 7 May. Missing this date can trigger HMRC's penalty points system, so it's worth diarising deadlines well in advance rather than relying on memory.
If HMRC has put you on an annual accounting scheme or you use the flat rate scheme, your actual deadlines can differ, so don't assume a standard quarterly pattern if you've opted into either. Keep a note of your VAT periods and the deadline for each one, ideally set as recurring reminders the day your period ends. A common habit that causes late filings is treating the one month and 7 days as a full month and a bit, when in reality it's the 7th of the second month and easy to overshoot by a few days.
Staying ahead of deadlines
The businesses that stay stress-free about VAT are usually the ones with records kept up to date throughout the quarter, not pulled together in the final week. Under Making Tax Digital, VAT-registered businesses also need to keep digital records and submit returns using compatible software such as Xero.
Building a monthly routine helps more than a quarterly crunch: reconcile bank feeds each month, review your VAT figure as it accrues, and set aside the VAT you've collected rather than spending it. Many businesses set aside output VAT into a separate pot as invoices are paid, so the cash is ready when the bill lands. If you're unsure whether something is standard-rated, reduced-rated, zero-rated, or exempt, get clarity at the time rather than guessing on the return, because correcting mistakes later involves amendments and possibly interest.
If you'd rather not spend your evenings chasing VAT figures, we can prepare and submit your returns for you, keeping you compliant while you get on with running your business. Book a discovery call and we can talk through your VAT setup.
