How to Submit Your VAT Return Online in 2025? (Step-by-Step Guide)

Introduction

Submitting a VAT return online might feel daunting at first but for many UK small businesses, it is now part of the regular rhythm of compliance. Since digital-filing became standard under Making Tax Digital (MTD), getting it right not only keeps you on the right side of HM Revenue & Customs (HMRC) but also gives you clarity over your cash flow and tax position.

In this step-by-step guide, we will walk you through everything you need to know in 2025: from preparing your figures and choosing the right software, to submitting your return correctly and paying any VAT due on time. By the end, you will feel confident and ready to file your next VAT return smoothly and efficiently.

At Finsoul Network, we help UK businesses simplify their financial compliance by guiding them through every step of their VAT and accounting processes so they stay accurate, compliant, and stress-free.

Why Submit Your VAT Return Online? Legal & Practical Context

Submitting your VAT return online is no longer just a convenience in most cases, it is a legal requirement for VAT-registered businesses in the UK. Here is why this matters (and how it helps you in practice).

Legal requirement & digital records

If you’re registered for VAT, you must submit your return using software that’s compatible with Making Tax Digital (MTD) unless you have been granted an exemption.

HMRC guidance states:

You must use functional compatible software to submit your VAT return.
If you are exempt (for example, due to religious objection or lack of internet access), you may still be able to file by post or via your online account.
The return must include accurate figures for total sales, total purchases, VAT you owe, and VAT you can reclaim.

Practical benefits for your business

Speed & accuracy: Digital submission reduces manual errors and improves your ability to track your VAT obligations in near-real time.

Cash-flow awareness: Knowing when your return is due, and having to pay any VAT by the deadline, helps you plan and avoid surprises. The standard rule is that you pay by the date shown on your return.

Compliance and audit trail: HMRC expects VAT-registered businesses to keep a clear digital audit trail of transactions, invoices and returns. Good records help you avoid penalties.

When supported by an experienced advisor like Finsoul Network, businesses can make this digital process even smoother, ensuring every return is submitted correctly and backed by robust digital records.

What happens if you do not submit online when required

If you are required to use MTD-compatible software but do not, or you miss deadlines:

You risk receiving penalty points or fixed-penalty notices from HMRC.
Use of incompatible software or failure to keep proper records can increase the risk of investigation and corrections by HMRC.

When you submit online and meet your obligations on time, you are not just fulfilling a legal requirement, you are also safeguarding your business’s financial health and building a stronger footing for growth

What You will Need Before You Start (Preparation Checklist)

Before you click “submit” on your online HM Revenue & Customs (HMRC) VAT return, doing a little prep up-front can save you time, stress and reduce the risk of mistakes. Here is your checklist for 2025.

Confirm your VAT registration & period

Make sure your business is actually VAT-registered and that you know which VAT accounting period you are working with (quarterly, monthly, or annually under special schemes).
Check that you’re using the correct “return period” when submitting.
Note the deadline: for most businesses it is one calendar month and seven days after the end of the accounting period.

Gather your sales & purchase records

Pull together a list of all taxable sales (outputs) for that period, and all purchase/expense invoices where you claim VAT back (inputs).
Make sure you have digital records, as required under Making Tax Digital (MTD) rules. For most VAT-registered businesses this is mandatory.
Check that the invoices/receipts you will use for input VAT claims are valid (supplier charged VAT, the business used them for taxable supplies, etc).

Choose and check your software is MTD-compatible

To submit your VAT return online you must use software that’s functional-compatible with HMRC’s MTD requirements (unless you have an approved exemption).
If you already have accounting software, check it’s set up correctly (business name, VAT number, correct VAT scheme selected).

Know the figures you will need to enter

You should have (ready): total value of sales (excluding VAT), total value of purchases (excluding VAT), VAT you owe, VAT you can reclaim.
If you import goods you may need to account for import VAT and know how to include it.

Set a reminder for the deadline & payment

Note the date your return is due and the date payment must reach HMRC. Missing these may trigger a penalty.
Make sure you have sufficient cash flow to pay any VAT due, or that you have got a claim ready if you’re reclaiming.

Step-by-Step: How to Submit Your VAT Return Online in 2025

1: Log into your online account / MTD-compatible software

Ensure you have access to your HM Revenue & Customs (HMRC) VAT online account via your Government Gateway or One Login credentials. Then open your accounting software that is “functional-compatible” for the Making Tax Digital (MTD) requirement.

2: Select the correct VAT return period

Choose the accounting period you are submitting for (usually quarterly but alternative schemes may apply). Double-check that the period end-date is correct so you do not submit the wrong time frame.

3: Enter or import your VAT figures into the software/return

Using your digital records, fill in or verify the key VAT boxes:

Box 1: VAT due on sales and other outputs: Include all VAT charged on goods/services, plus reverse charge output VAT where applicable.

Box 2: VAT due on acquisitions of goods: Only applicable for specific cases (e.g., goods acquired in Northern Ireland from the EU).

Box 3: Total VAT due: Usually Box 1 + Box 2.

Box 4: VAT reclaimed (input tax): VAT you can reclaim on business purchases/expenses, subject to rules (valid invoice, business use, etc).

Box 5: Net VAT to pay or reclaim: Box 3 minus Box 4. If positive you pay HMRC; if negative you may reclaim.

Box 6: Total value of sales and outputs (excl. VAT): All sales and other outputs, net of VAT.

Box 7: Total value of purchases and inputs (excl. VAT): All purchases and costs, net of VAT.

Box 8 & Box 9: Only needed in specific cases (e.g., Northern Ireland goods to/from EU).

4: Review all figures carefully

Make sure you’ve included everything required (sales, purchases, imports, reverse charge where applicable). Use digital software’s validation functions if available. Mistakes can lead to penalties or interest.

5: Submit the return via software or HMRC portal

Once all figures are correct and you have connected the software to HMRC (as required under MTD), send the return. You should receive an acknowledgement.

6: Make the payment (if applicable) or note the reclaim

If Box 5 shows you owe VAT, pay the amount by the deadline set on your return. If you are reclaiming, retain proof of claim and ensure the balance shows in your HMRC account.

7: Save confirmation & keep your records

Download or screenshot the submission receipt. Keep all supporting digital records invoices, receipts, adjustments for at least six years, as required by HMRC.

Special Cases & Additional Considerations

While the standard process for submitting a HM Revenue & Customs (HMRC) VAT return online covers most businesses, there are important special cases and additional details you should know especially if your situation is not “typical”.

Annual Accounting Scheme

If your business uses the VAT Annual Accounting Scheme you report once a year instead of every quarter. In this case:

Your VAT return is due up to 2 months after the end of your 12-month accounting period.

You will also need to make advance payments (monthly or quarterly) toward your VAT bill during the year.

If your accounting period is less than 4 months, different shorter deadlines apply.

If you operate this way, make sure your preparation and software reflect your scheme correctly.

De-registration and Final Return

If your business is cancelling its VAT registration (for example you fall below the threshold or stop trading):

You will need to file a “final return” when your registration ends.

From 13 June 2025, new regulations (Value Added Tax (Amendment) Regulations 2025) give HMRC formal power to extend the deadline for that final return if needed.

Even though the extension power is formalised, you should aim to submit on time in line with the standard one-month (plus one week) rule when you deregister.

Monthly Reporting or Payments on Account

Some businesses, particularly those with large VAT liabilities or frequent repayments, may be required to submit monthly returns or make monthly payments on account.

If this applies to you, your deadlines and cash-flow planning must reflect a shorter interval than the typical quarterly cycle.

Cross-border, Imports & Exports

If your business imports goods or sells to/from the EU/NI, or deals in digital services, additional rules may apply:

For example, the reverse charge mechanism, import VAT accounting, or one-stop-shop (OSS) for digital services.
Ensure your software and your records reflect these special entries (e.g., Box 2 or other special boxes on your VAT return).

Software, Exemptions & Paper Filing

While online digital submission via MTD-compatible software is the norm, there are limited exceptions:

If HMRC grants an exemption (for example due to religious belief or lack of internet access), you may file in another format.

Make sure your software is functional-compatible with MTD rules (digital records, digital links). If not, penalties may apply.

Always check that your software is approved and that your integrations are up to date.

Common Mistakes and How to Avoid Them

Even if you have got your preparation right and you are using the correct software, many small businesses still make avoidable errors when submitting a HM Revenue & Customs (HMRC) VAT return online. Knowing what these common pitfalls are can help you avoid delays, refunds being rejected, or penalties.

Some of the most frequent mistakes

Missing the deadline: When your VAT accounting period ends, the return must generally be submitted within one calendar month + seven days (for quarterly returns). Filing late triggers the points-based penalty regime. How to avoid it: Set automated reminders; mark the deadline in your calendar; submit a few days early.

Using non-compliant software or digital records: Under the Making Tax Digital (MTD) requirement, for most VAT-registered businesses you must use software that is “functional-compatible” for digital record-keeping and submission. How to avoid it: Verify your software is listed as MTD-compliant; ensure digital links between records are maintained.

Error in key boxes of the VAT return (Boxes 1-9): Mistakes often happen in interpreting what should go in each box: for example, forgetting a reverse charge, input VAT not supported by valid invoice, import VAT mis-entered.

How to avoid it: Use the official HMRC guide for completing boxes. Double-check each figure and reconcile with your accounting records.

Poor or incomplete record-keeping: If your purchases (for example) don’t have proper VAT invoices, or you mix private and business use, you may lose the right to claim input VAT or face adjustments later. How to avoid it: Store invoices/receipts digitally; separate personal vs business expenses; reconcile regularly.

Not adjusting for special transactions: If you import goods, use postponed VAT accounting, operate under special schemes or have trade from Northern Ireland/EU, you must ensure you account for those transactions correctly (e.g., Box 2, Box 8/9).

How to avoid it: Understand if your business falls into a special category; ask your software or advisor; include correct boxes and values

Quick checklist to avoid mistakes

Mark the submission and payment date as soon as your period ends.
Confirm your software is up-to-date and MTD-compatible.
Reconcile your sales and purchase records before you open the return.
Use the official guidance/box-by-box list to fill return boxes.
Keep digital copies of all invoices, import statements, and proof of support for input VAT claims.
Review your return figures (especially Box 5: net VAT to pay or reclaim) before you hit “submit”.
After submitting, save the acknowledgement and update your records accordingly.

Tips for Smooth Submission & Best Practice

Submitting your HM Revenue & Customs (HMRC) VAT return online doesn’t have to feel stressful with a few smart habits, you can make the process efficient and error-free. Here are some tips and best-practice ideas you can adopt.

If you’d prefer expert guidance, Finsoul Network offers professional VAT support for UK businesses, helping you reconcile your records, review submissions, and stay compliant under Making Tax Digital (MTD) rules.

Automate your record-keeping

Use cloud-based accounting or bookkeeping software that connects to HMRC and supports Making Tax Digital (MTD). This ensures your records are digital, linked, and ready for the return. Digital records reduce manual entry and the risk of missing key transactions.

Reconcile regularly - not just at the last minute

Don’t wait until the period ends to review everything. Monthly (or even weekly) checks of your sales, purchases and VAT figures help you spot errors early, avoid surprises, and keep your cash-flow on track.

Use a checklist & set reminders

Mark the deadline once your VAT period ends and set reminders a few days beforehand. Use a prepared checklist to verify:

All invoices entered
Purchases eligible for input VAT recorded
Imported goods and special transactions accounted for
Software linked to HMRC and ready for submission

Review before you submit

Before clicking “submit”, check key figures (Boxes 1-9) correspond with your accounting records. Make sure you haven’t missed anything like reverse charges, import VAT, or special scheme entries. A simple final review helps reduce risk of error or correction requests by HMRC.

Save submission evidence & store your records securely

Once you’ve submitted, save the acknowledgement/confirmation from HMRC (either a PDF or screenshot). Also, retain your digital (or paper‐backed) records for the required period. For VAT-registered businesses: at least 6 years.

Stay informed of changes

Tax rules, deadlines, software requirements and schemes change over time keep up with updates from HMRC or your tax advisor so you’re always compliant and using the latest approach.

Consider professional review

Even if you handle things internally, a periodic review by a tax professional or accountant can help catch areas of risk (e.g., incorrect VAT rate application, record-keeping gaps, export/import issues) and improve your process.

Frequently Asked Questions (FAQs)

1. When is my VAT return due in the UK?

For most VAT-registered businesses submitting quarterly returns, the deadline is one calendar month and seven days after the end of the accounting period. If you are on the Annual Accounting Scheme, the return is due 2 months after your accounting period ends (or 1 month if the period is under 4 months).

2. Do I need to submit a VAT return even if I have no sales or owe nothing?

Yes, being VAT-registered means you must submit your return (including nil returns) for each period, unless you have deregistered or are exempt.

3. What software do I need to submit my VAT online?

You need to use software that is Making Tax Digital (MTD) compatible (i.e., makes digital records and submits electronically) unless you’ve been granted an exemption by HM Revenue & Customs.

4. What happens if I miss the submission or payment deadline?

If you miss the deadline, you may face penalty points, surcharges or interest for late payment.

For example: repeated late submissions trigger the default surcharge regime.

5. Can I change the frequency of my VAT returns to monthly or annually?

Yes, some businesses submit monthly (especially if they regularly reclaim VAT) or use the Annual Accounting Scheme (usually if turnover is below the eligibility threshold).

6. How long must I keep my VAT records?

You must keep digital (or paper‐backed) records of your VAT transactions, sales, purchases, invoices for at least six years (in many cases) so you can support the figures in your return and comply with HMRC requirements.

7. If I use the Annual Accounting Scheme, how does that affect deadlines and payments?

Under the Annual Accounting Scheme:

You submit one VAT return per year, rather than quarterly.
You will make advance payments (monthly or quarterly) towards your VAT bill during the year.
The final balancing payment is due by the deadline of 2 months after the period ends (less than 4 months period → 1 month) per HMRC rules.